Sasfin Annual Report 2007 - ShareData Online · Email address: [email protected] Web addresses: Call: 0861-sasfin or toll-free 0800 002 538 Group informationSasfin Group Contact Information

HOLDINGS LIMITED

Sasfin A

nn

ual R

epo

rt 2007

Sasfin cover final 10/15/07 11:34 AM Page 1

SASFIN GROUP CONTACTINFORMATION

Designed by

Printed by I

CAPE TOWN4th Floor Southern Life Centre8 Riebeeck StreetCape Town 8001PO Box 7520 Roggebaai 8012Tel: +27 21 443 6800Fax: +27 21 443 6882

PRETORIABuilding A Ground Floor South WingLord Charles Office Park337 Brooklyn RoadBrooklyn 0181PO Box 36002, Menlo Park 0102Tel: +27 12 425 6003Fax: +27 12 425 6200

INNOVENT RENTAL AND ASSETMANAGEMENT SOLUTIONS (PTY) LIMITED

10th Floor Sandton Office TowersSandton City 2196PO Box 782005 Sandton 2146Tel: +27 11 884 8274Fax: +27 11 784 6599

PREMIER FREIGHT (PTY) LIMITED

JOHANNESBURG90 Electron AvenueIsando 1620PO Box 11288 Aston Manor 1630Tel: +27 11 573 9000Fax: +27 11 573 9599


DURBAN22 Keswick RoadMorningsideDurban 4001PO Box 47669 Greyville 4023Tel: +27 31 312 9352Fax: +27 31 312 0088

PORT ELIZABETH1st Floor Mercantile PlazaRing Road Greenacres 6045PO Box 1192 Port Elizabeth 6000Tel: +27 41 363 7660Fax: +27 41 363 5384

Email address: [email protected] addresses: www.sasfin.comwww.sfpsecurities.comwww.premierfreight.co.zawww.innovent.co.za

Call: 0861-sasfin or toll-free 0800 002 538

Group informationSasfin Group Contact Information

A Geoff Creation

OUR VISION

Entrepeneural corporate, commercial and private clients seekingwealth creation, enhancement and preservation.

OUR VALUES

The Sasfin group has identified the following core values as beingimperative to the achievement of its objectives.

• Satisfy all our stakeholders• Act with integrity, fairness and trust in all matters• Stay transparent and honest whilst striving for exellence• Focus 100% on our clients needs• Instil passion and create a culture of entrepeneural thinking and inovation• Nurture our our personnel and contribute to the development of our country

OUR MISSION

To be the preferred specialist banking and financial serviceprovider in our chosen markets.

OUR MISSION, VISION VALUESOUR MISSION, MARKETS AND VALUES

OUR MISSION

OUR MARKETS

OUR VALUES

To be the preferred specialist banking and financial servicesprovider in our chosen markets.

Entrepreneurial corporate, commercial and private clients seekingwealth creation, enhancement and preservation.

The Sasfin Group has identified the following core values as being imperative to the achievement of its objectives:

• satisfy all our stakeholders• act with integrity, fairness and trust in all matters• stay transparent and honest whilst striving for excellence• focus 100% on our clients’ needs• instil passion and create a culture of entrepreneurial thinking and innovation• nurture our personnel and contribute to the development of our country


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ContentsContents

:0 00:01

DefinitionsDefinitions

2Group Salient Features

3Group Financial Highlights

4Group Structure

6Chairman’s Report

10Chief Executive Officer’s R

eport

17Risk Management Report

20Compliance Report

22Corporate Governance Report

28Sustainability

Report

32Directors’ R

esponsibility Statement

32Company Secretary’s Certific

ate

33Report of the Independent Auditors

34Directors’ R

eport

38Balance Sheets

39Income Statements

40Cash Flow Statements

41Statements of Changes in Equity

42Notes to the Financial Statements

91Shareholder and Administra

tive Information

93Notice of Annual General Meeting

96Sasfin Group Contact Information

InsertForm of Proxy

InsertGroup at a Glance 2007/2008

ABIAccredited Business In

troducer

BEEBlack Economic Empowerment

Circle CapitalCircle Capital Ventures (Pty) Limited

DMTNDomestic Medium Term Notes

ERMEnterprise Risk Management

FSCFinancial Sector Charter

HNWIHigh Net Worth Individual

HRHuman Resources

InnoVentInnoVent Investment Holdings (Pty) Limited

InnoVent RentalsInnoVent Rental and Asset Management (Pty) Limited

NCANational Credit Act

PIBPIB Financial Services (Pty) Limited

PioneerPioneer Employee Benefits

(Pty) Limited

PremierPremier Freight (Pty) Limited

SALSasfin Asia Limited

SAMSasfin Asset Managers (P

ty) Limited (previously known

as Faranani Asset Managers (Pty) Limited)

SasCredSasCred Financial Services Limited

Sasfin/the Company/the GroupSasfin Holdings Limited

SASPSouth African Securitis

ation Programme (Pty) Limited

(previously known as Equipment Rentals Securitisation

No. 1 (Pty) Limited)

SasSecSasfin Securitie

s (Pty) Limited (previously known as

Sasfin Frankel Pollak Securities (Pty) Limited)

SBMSBM Nedbank International Limited of Mauritiu

s

SFASSasfin Financial Advisory Services (Pty) Limited

(previously known as Sasfin Investment and Asset

Managers (Pty) Limited)

SFSSasfin Financial Services (Pty) Limited

SMESmall and Medium sized Enterprises

The BankSasfin Bank Limited

The JSEJSE Limited

The SARBSouth African Reserve Bank

TOPPTraining Outside Public Practice

Sasfin annual report 07 front 10/15/07 11:49 AM Page 1

2007 2006 2005 2004 2003

Group Salient FeaturesGroup Salient Features

Balance sheet

Total assets (Rm's) 2 545 2 460 1 772 1 382 1 256

Total gross loans and advances (Rm's) 1 552 1 223 1 115 991 888

Non-performing loans and advances (Rm's) 71 64 27 32 45

Gross loans and advances growth (%) 27,0 9,6 12,6 8,8 38,5

Income statement

Headline earnings (Rm's) 140 106 85 60 20

Earnings attributable to ordinary shareholders (Rm's) 140 156 85 60 20

Financial performance

Return on ordinary shareholders' average equity (%) 31,1 31,2 33,5 30,6 12,6

Return on total average assets (%) 5,6 5,0 5,4 4,6 1,7

Operating performance

Net interest margin on interest bearing assets (%) 7,0 6,7 8,5 8,5 6,2

Non-interest income to total income (%) 74,3 76,5 65,6 64,6 67,9

Efficiency ratio (%) 55,6 57,9 61,1 68,2 87,6

Non-performing advances to total gross loans and advances (%) 4,6 5,2 2,4 3,2 5,1

Share statistics

Headline earnings per ordinary share (cents) 523 404 326 236 83

Earnings per ordinary share (cents) 524 596 328 236 83

Diluted earnings per ordinary share (cents) 514 577 316 233 83

Diluted headline earnings per ordinary share (cents) 514 391 315 233 83

Dividends per ordinary share relating to income for

the year (cents) 207 161 130 94 33

Dividends per preference share (cents) 909 790 503 – –

Net asset value per ordinary share (cents) 1 844 1 507 1 075 873 678

Capital adequacy

Group capital to risk weighted assets (%) 33,7 31,2* 31,8* 24,9 30,6

The Bank capital to risk weighted assets (%) 31,7 28,3 25,7 25,8 35,6

Employees

Permanent staff complement 496 487 435 451 467

* Restated

:0200:02

years ended 30 June


:0300:03

FINANCIAL HIGHLIGHTS

0

100

200

300

400

500

600

2003

2004

2005

2006

2007

0

1

2

3

4

5

6

2003

2004

2005

2006

2007

2003

2004

2005

2006

2007

0

500

1 000

1 500

2 000

2 500

3 000

2003

2004

2005

2006

2007

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 00020

03

2004

2005

2006

2007

0

5

10

15

20

25

30

35

Headline earnings per ordinaryshare (cents)

Dividends per ordinary share (cents)

Return on total average assets(%)

Return on ordinary shareholders’average equity(%)

Total assets(R million)

Net asset value per ordinary share(cents)

8333

236

94

326

130

404

161

523

207

1,7

4,6

5,4

5,0

5,6

12,6

30,6

33,5

31,2

31,1

1 25

6 1 38

2

1 77

2

2 46

0

2 54

5

678

2003

2004

2005

2006

2007

Sasfin Holdings Limited Share Price

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

00

2

4

6

8

10

12

14

16

18 Gross advances(R million)

Non-Performing Loans:Advances (%)

Impairment Provision:Advances (%)

888

991

1 11

5 1 22

3

1 55

2

%

Rm

illi

on

Non-performing loans and impairments

873

1 07

5

1 50

7

1 84

4

2003

2004

2005

2006

2007

35,6

25,8

25,7

28,3

31,7

0

6

12

18

24

30

36

30,6

24,9

31,8

31,2

33,7

Bank capital adequacy (%)

Group capital adequacy (%)

Group Financial HighlightsGroup Financial Highlights


Group StructureGroup Structure

:0400:04

SASFIN HOLDINGS LIMITED

SASFIN BANK LIMITED 1

QUORUM LEASING 1

SERVICES(PTY) LIMITED

SOUTH AFRICANSECURITISATION

PROGRAMME(PTY) LIMITED 1

(Residual ownershipheld via a trust)

SASFIN ASIALIMITED 1

(Registered inHong Kong)

SASCRED FINANCIALSERVICES LIMITED 1

(Registeredin Jersey)

INNOVENTINVESTMENTHOLDINGS

(PTY) LIMITED 9

INNOVENT SPV 1(PTY) LIMITED 9

INNOVENT SPV 2(PTY) LIMITED 9

INNOVENT RENTALAND ASSET

MANAGEMENTSOLUTIONS

(PTY) LIMITED 1

SASFIN FINANCIALSERVICES

(PTY) LIMITED 9

SASFIN PROPERT(PTY) LIMITED an

SASFIN PROPERTIE(PTY) LIMITED

SASFIN SECURITI(PTY) LIMITED 3

SASFIN PRIVATE EQFUND MANAGER

(PTY) LIMITED

SASFIN FINANCIAADVISORY SERVIC

(PTY) LIMITED

SASFIN INSURANBROKERS

(PTY) LIMITED

SASFIN ASSETMANAGERS

(PTY) LIMITED 4

PIONEER EMPLOYBENEFITS

(PTY) LIMITED

100%

100%

100%

6%

4%

90% 33,6% 90% 100%

4%

6%

100%

100%

100%

100%

100%

as at 31 July 2007


GROUP STRUCTURE

:0500:05

LIMITED

SASFIN FINANCIALSERVICES

(PTY) LIMITED 9

SASFIN PROPERTIES(PTY) LIMITED and

SASFIN PROPERTIES II(PTY) LIMITED 6

SASFIN PRIVATEEQUITY INVESTMENT

HOLDINGS(PTY) LIMITED 10

PREMIER FREIGHT(PTY) LIMITED 7

SASFIN SECURITIES(PTY) LIMITED 3/4

SASFIN PRIVATE EQUITYFUND MANAGERS

(PTY) LIMITED 5

SASFIN FINANCIALADVISORY SERVICES

(PTY) LIMITED 2

SASFIN INSURANCEBROKERS

(PTY) LIMITED 2

SASFIN ASSETMANAGERS

(PTY) LIMITED 4

PIONEER EMPLOYEEBENEFITS

(PTY) LIMITED 2

90% 100% 100% 63%

SASFIN-MDMPRIVATE EQUITY

FUND I 5

HECNYTRANSPORTATION SA

(PTY) LIMITED 84%

6%

100%

100%

100%

100%

67,5%

100%

100%

100%

30%

52,4% 50%

KEY:1 = Banking businesses2 = Insurance and financial planning businesses3 = Securities trading4 = Portfolio management5 = Private equity management6 = Property owning7 = Customs clearing8 = Freight forwarding9 = Investment holding10 = Private equity investment



Chairman’s ReportChairman’s Report

:0700:07

CHAIRMAN’S REPORT

It gives me great pleasure to present Sasfin’s 2007Annual Report, the 20th since its listing on the JSEin 1987.

During this 20 year period, Sasfin has evolvedfrom a small trade and equipment financier into abanking group with a wide offering of servicesand facilities for its target market ofentrepreneurial corporate, commercial andprivate clients.

2007 has been another excellent year for Sasfin,with headline earnings showing an increase of32% over 2006.

Over the last 20 years Sasfin has achieved anaverage annual return on equity of 30% and acompound annual growth rate in headlineearnings per share of 26%. Based on its 1987listing price of 60 cents per share and its closingprice at the June 2007 year end of 4 810 cents, andincluding dividends paid during the period, Sasfinhas recorded for shareholders a compoundannual return of 25%.

Developments at Sasfin

PROPOSED STRATEGIC TRANSACTIONIn Sasfin’s results announcement of 11 September2007, shareholders were advised that Sasfin hadentered into an agreement in terms of which itwould allot and issue 9 630 000 new Sasfinordinary shares to Circle Capital as a specific issueof shares for cash at a subscription price ofR495 million or R51,40 per share subject to thefulfilment of certain suspensive conditions. Thiswould result in Circle Capital owning 26% of theissued ordinary shares of Sasfin.

The suspensive conditions referred to aboveinclude regulatory approvals and the approval ofthe requisite majority of Sasfin’s shareholders in ageneral meeting. Circle Capital is in the process ofsecuring the necessary funding for thetransaction.

Circle Capital is a black-owned investmentholding company, whose Chairperson isDr Mamphela Ramphele and Chief Executive isMr Hlumelo Biko. Sasfin anticipates that it willbenefit from its association with Circle Capitaland from the new business opportunities whichCircle Capital will be able to introduce to theGroup.

BLACK ECONOMIC EMPOWERMENTIt has been agreed with InnoVent, the Group’sexisting BEE partner, that following theimplementation of the Circle Capital transaction,InnoVent will exchange its shareholding invarious Sasfin subsidiaries for shares in Sasfin.Accordingly, Sasfin is expected to becomeapproximately 28% black-owned.

Subject to SARB approval, after the transactionwith Circle Capital, it is anticipated that Sasfinwill have four black directors, including twowomen.

Resulting, inter alia, from the developmentsreported above, Sasfin’s rating in terms of the FSCis likely to increase from 52% to approximately70%, giving Sasfin one of the highest scores in thebanking sector.

SECURITISATIONSasfin has re-engineered its securitisation vehicle,now known as SASP, into a full DMTN programme,enabling it to securitise various asset classes fromvarious originators, using both short- andmedium-term funding. Since 1991, when Sasfinpioneered the concept in South Africa,securitisation has been, and will continue to be,an important source of funding for the Bank.

PRIVATE EQUITYThis unit, which was launched in the previousfinancial year, has grown significantly, and nowincludes a real estate section, which has alreadymade a significant contribution to Sasfin’s results.

TRADE FINANCEThis unit opened an office in Hong Kong in July2007 and has established a desk for Africanclients, which is becoming very active.

Capital

The Circle Capital transaction will boost Sasfin’sequity base to approximately R1,2 billion,resulting in a capital adequacy ratio of 50,5% (at30 June 33,7%) for the Group, against a requiredcapital adequacy ratio of 9,75% in terms of BaselII. This will enable Sasfin to continue on its stronggrowth path. A number of initiatives are beingconsidered to productively deploy this increase incapital.


Chairman’s ReportChairman’s Reportcontinued

:0800:08

Economic environment

Global economic performance over the past fiveyears has been exceptional, spearheaded by theeconomic growth in China, India and otheremerging economies, and in particular theirdemand for raw materials. Consumer demand andcorporate expenditure have benefited fromsustained low real interest rates which, evenfollowing the recent trend of monetarytightening, remain comparatively accommo-dative. However, current historically highcommodity price levels, consequent risinginflation and the US sub-prime mortgage lendingcrisis have created a more volatile and uncertainenvironment internationally. Downside risks haveincreased significantly, which has already had(and is likely continue to have) an impact ontrading conditions in both developing and matureeconomies.

The South African economy, on the back of thispositive international environment, and withsound economic policies firmly in place, hasperformed well over the past number of years.Government deservedly commands internationalrespect for its disciplined management of theSouth African economy and this high regard hastranslated into unprecedented sums of foreigncapital inflows into SA financial markets.

Whilst there are various proposals and initiativesin place to increase the growth rate of thedomestic economy, there are a number of factorsthat indicate that in the short term there couldwell be a meaningful degree of volatility incertain areas of the economy. The global financialmarket turbulence brought on by the impact ofthe US sub-prime mortgage crisis is likely topersist for some time. Internationally, the lendingenvironment has been forced to re-assess thepricing of risk after maintaining an inverted yieldcurve over the course of the past few years.Locally, the NCA and the 300 basis points increasein interest rates since June 2006 have caused aslowdown in retail economic activity andconsumer demand.

The prognosis, though, remains positive. It seemsunlikely that the seemingly insatiableinternational demand for commodities willdecline by any significant degree in the mediumterm. It is hoped that the current politicalleadership debate will produce leaders, who will

continue with policies that enhance economicstability and growth, and who will apply SouthAfrica’s resources effectively to enhance theliving standards of the underprivileged membersof the South African community.

Compliance

The regulatory environment continues to placepressure on the banking industry. Sasfin hasinvested enormous amounts of management timeand money in preparing itself for Basel II and iswell placed for its effective implementation inJanuary 2008.

Prospects

Sasfin is gearing up for continued growth acrossall its areas of activity, by increasing itsinfrastructure in terms of financial and humanresources. In particular, there is enormous scopefor growth in Sasfin’s:

• Capital division, comprising Private Equity(including real estate), Treasury (includingInternational Treasury following theestablishment of a foreign exchange tradingdesk) and Corporate Finance services

• Wealth Management division, especially Assetand Fund Management and Financial Planning

• Trade Finance unit, following the opening of itsHong Kong office.

The demand for Sasfin’s products and services,coupled with the expected increase in its capital,as well as the modernisation of its securitisationstructure, place Sasfin in a strong position forgrowth throughout the organisation.

Awards

It is very satisfying for Sasfin to have received thefollowing acknowledgements during the yearunder review:

• The Investment Analysts Society awardedSasfin the Squirrel trophy for the bestcorporate reporting in the sector SmallCompanies for the 2006 financial year.

• Sasfin was ranked 13th in the Financial Mail’s2007 assessment of the Top 20 ListedCompanies.


Chairman’s ReportChairman’s Reportcontinued

:0900:09

CHAIRMAN’S REPORT

Welcome and appreciation

Welcome to both Dolly Mokgatle and ShahiedRylands as non-executive directors of theCompany, in addition to their appointment asdirectors of the Bank.

I express my appreciation to my fellow directorsand Sasfin’s staff, who have again performedadmirably in achieving these excellent results andin strengthening Sasfin’s infrastructure. Inparticular, I thank our executive directors,Roland Sassoon, Alan Greenstein and MalcolmSegal, for their continued dedicated commitmentand valued contribution during the past year.I also thank the SARB and our professionaladvisors for their guidance, our clients for theirinvaluable support and our shareholders for theirfaith in Sasfin.

Martin GlattChairman6 September 2007



:1100:11

CHIEF EXECUTIVE OFFICER’SREPORT

CEO’s Report

Sasfin’s target market

Entrepreneurs have a pioneering spirit, with apropensity to sail uncharted waters. This is oftenaccompanied by a lack of financialsophistication, frustrating their ability to secureadequate bank facilities. A proactive and highlypersonalised relationship with a bank thatunderstands their needs and inherent risks istherefore essential. Sasfin is well equipped toservice its growing base of corporate, businessand private clients in this target market, with its:

• entrepreneurial culture

• dedicated and talented people

• comprehensive range of banking and financialproducts

• state of the art information technology

• considerable financial resources.

Results

It is pleasing to report that headline earnings forthe year under review increased by 32% toR140 million, representing returns on ordinaryshareholders’ average equity of 31,1% (2006:31,2%) and on total average assets of 5,6% (2006:5,0%).

Prospects

With increasing globalisation, investment incommodity-rich emerging countries with healthyeconomic growth, supported by good corporategovernance and a robust regulatory andlegislative framework, is assured. As long asSouth Africa conducts its economic managementwith maturity and responsibility, relatively strongforeign direct investment is likely to continue tomeet the needs of the growing South Africaneconomy, as it develops its infrastructure.

Sasfin’s target market, which the large banks arenot as well equipped to service, is growing at agreater rate than the economy as a whole. Thus,the demand for Sasfin’s products and services islikely to remain strong. With this in mind, Sasfinhas, subject to the conditions precedent stated inthe Chairman’s Report, negotiated a transactionwith Circle Capital that will:

• increase its capital and reserves byR495 million to R1,2 billion and

• improve its positioning in terms of the FSC.

This development, together with those listedbelow, will enable Sasfin to further strengthen itsposition in the South African bankingenvironment:

• The recent establishment of a Foreign Exchangetrading desk

• The recent opening of an office in Hong Kongfor SAL, which, subject to SARB approval,intends in due course to apply for a RestrictedBank Licence

• The recent conversion of Sasfin’s securitisationstructure into a full DMTN programme,enabling the Group to securitise a variety ofasset classes

• The growth of Sasfin’s Trade Finance unit, bothin South Africa and in other African countries

• The growth and development of Sasfin’sCapital division, which includes CorporateFinance, Private and Property Equity andTreasury and Securitisation

• The growth and development of Sasfin’sWealth Management division, particularly inAsset Management and Financial Planning; and

• The intended launch of a Property Financingunit.

Capital adequacy

On 30 June 2007, the Group capital adequacy was33,7% (2006: 31,2%). Together with the capitalinjection flowing from the Circle Capitaltransaction, the Group has sufficient capital forsignificant expansion.

Chief Executive Officer’s Report


CEO’s ReportChief Executive Officer’s Reportcontinued

:1200:12

Overview per operating divisionand support department

BUSINESS BANKINGContribution to headline earnings – 2007: R56 million (2006: R55 million)

This division provides financing facilities forequipment, trade and debtors. The reason for thesmall increase in earnings year on year, is that in2006 the Group’s earnings included a windfallforeign exchange gain of R15 million. Excludingthis non-recurring item, the increase in thecontribution to headline earnings was 40%.

Loans and advances increased by 27% toR1,5 billion. Despite an increase in interest ratesof 200 basis points, it is pleasing to note thatimpairments in relation to average loans andadvances has risen by only 0,1%, and non-performing loans in relation to average loans andadvances has dropped by 0,4% year on year,indicating that the growth in loans and advanceshas not been at the expense of quality.

Equipment Rental Finance UnitThis business unit specialises in rental finance fora wide and growing range of equipment, byproviding a valuable service to suppliers ofequipment to enable them to offer theirequipment on a rental basis. This unit alsoincludes the Group’s 33,6% interest in InnoVentRentals, a black-owned equipment residual rentalcompany.

This unit had an excellent year, having increasedits market share by growing its loans andadvances by 20% and is regarded as a marketleader in its field. Despite the increases in interestrates and current market volatility, this unit isexpected to continue to perform well.

Business Finance UnitThis unit, which houses the trade, debtor andcapital equipment finance activities of the Bank,experienced substantial growth, particularly in itstrade finance activities where, year on year, thevolume of business increased by 24% andadvances increased by 35%. The unit is expandingits operations into foreign markets, particularlyin Africa, which is an exciting development.

With SARB’s approval of the Bank as anAuthorised Dealer in Foreign Exchange, it is nowin a position to open bank letters of credit and to

undertake currency transactions for its clients.Furthermore, with the opening of an office inHong Kong, SAL can offer clients a fully integratedtrade finance solution, from procurement tofinancing and transportation logistics. GaryPatterson, an international banker with manyyears’ experience, who has been appointedManaging Director of SAL, is tasked withimplementing this initiative. Once SAL’sinfrastructure has been developed, it intends,subject to SARB approval, to apply for a RestrictedBanking Licence from the Hong Kong MonetaryAuthorities, which will enable SAL to access one ofthe world’s premier financial centres.

Debtor finance activities remained stable, holdingtheir own in a competitive market. Though still inits infancy, the capital equipment financemarketing team has proved itself and thepotential, going forward, is excellent.

CAPITALContribution to headline earnings (excludingTreasury) – 2007: R27 million (2006: R7 million)

This division undertakes Private Equity investmentand provides Corporate Finance services, both toits clients and the Group. It also includes theGroup’s Treasury, which funds the activities of theGroup, inter alia through its equity, includingpreference shares, its securitisation structure andits deposit book.

Private Equity UnitThis unit was established in the 2006 financialyear with the acquisition of a controlling stake inSasfin MDM Private Equity Fund 1 (“Fund 1”).

The board has earmarked 10% of group assets forinvestment in private equity, which is currentlyfunded by way of preference shares issued by Sasfinin prior years.

Fund I is a fully invested fund that holds a diverseportfolio of investments in telecommunications,technology, distribution and financial servicescompanies. The major underlying assetsperformed well during the period under review,as did the benchmark market proxies used as thebasis for valuation. These factors gave rise to asignificant mark-to-market revaluation surplus,over and above the return of capital to investorsfrom certain asset disposals. Fund I has recentlyresolved to extend its life for a further four yearsto February 2012, as it considers that theunderlying assets are well positioned to continueto deliver superior returns.


CEO’s Report

:1300:13


Fund II, which comprises Sasfin’s private equityinvestments since the establishment of this unit,is in its early stages of development and itsinvestment focus is to provide growth anddevelopment capital to entrepreneurialcompanies with exciting growth prospects. Fourinvestments have been made to date, with severalmore under consideration. The Group’s valuationpolicies are such that mark-to-market surplusesare generally not recognised in the first year ofinvestment. Deal flow is strong, much of whichemanates from Sasfin’s Business Banking division.

During the year, Sasfin’s Real Estate Fund (“SREF”)was launched. The focus of SREF is to provideequity risk capital to property entrepreneurs whohave the experience and expertise to identify realestate investment opportunities that offer equityrelated returns. Five investments had been madeby financial year-end, which have yieldedexcellent mark-to-market revaluation surpluses,based on independent third party valuations.

Corporate Finance UnitThis unit provides JSE Sponsor and AltX DesignatedAdvisor services to listed companies andinvestment banking and corporate finance tolisted and unlisted companies. It focuses oncompanies with a market capitalisation of up toR10 billion, where it is a dominant participant.A number of significant mandates were won andsuccessfully executed during the year underreview, and the unit continues to produce goodresults. In addition, the unit continues to providestrategic advisory services to the Group. Becauseof the growth in demand for its services, a furtherinvestment in capacity has been made and the unitnow consists of eight professionals. The buoyantmarkets and a growing reputation for qualityservice delivery bode well for this unit’s prospectsfor the year ahead.

Treasury and Securitisation UnitContribution to headline earnings – 2007: R28 million (2006: R15 million)

This unit is responsible for Group funding, whichincludes the management of its securitisationstructure, as well as providing foreign exchangeservices.

Domestic Treasury offers clients a range ofdomestic money market products andsecuritisation commercial paper. The unit hasperformed well in raising funding for Sasfin’slending businesses, with deposits increasing by19% to R746 million (2006: R627 million).

During the year under review there was no needto increase the Group’s use of securitisationfunds, which remained relatively constant atR675 million. Sasfin has finalised the conversionof the current term securitisation scheme to amulti-seller, segregated asset class, evergreenDomestic Medium Term Note programme. Therevised structure will enable Sasfin to securitisevarious asset classes at an attractive cost throughthe issuance of long-, medium-, and short-termcommercial paper.

Prior to year-end, Sasfin was approved as anAuthorised Dealer in Foreign Exchange and anInternational Treasury unit has been established.International Treasury will provide a range offoreign exchange services to the Group and toits clients.

WEALTH MANAGEMENTContribution to headline earnings – 2007: R21 million (2006: R23 million)

The Group’s non-banking businesses, includingthis division, have been transferred to a newGroup subsidiary, SFS.

This division comprises the stockbroking andportfolio management subsidiary, SasSec, whichis now 118 years old; the asset managementsubsidiary, SAM and the life assurance,investment and financial planning units ofsubsidiary, SFAS.

The division also offers clients internationalstockbroking, asset management and trust andfiduciary services.

The healthcare, short-term insurance, assetconsulting activities and the Group’s investmentin Pioneer now fall within the Specialised Servicesdivision and are dealt with under that section.

This division has undergone a comprehensivestrategic review, as a result of which name changeshave been effected, new products will beintroduced, and a new, dedicated, assetmanagement business will be launched.

Chief Executive Officer’s Reportcontinued



:1400:14

Stockbroking and Asset Management UnitSasSec’s tax rate increased from 16% in 2006 to29% in the current year as a result of its previoustax losses being fully utilised, which explains itsreduced contribution. Wealth Management’s pre-tax income actually grew by 26%.

SasSec had a good trading year, buoyed bycontinued strong stock market activity.

Funds under administration grew by 45% toR32 billion, with managed fees exceeding thetarget of 25% of total income.

The Sasfin International Fund, registered inLuxembourg and managed by Edmond deRothschild Asset Managers, Paris (a member ofGroupe LCF Rothschild) (“EDRAM”), has attractedalmost US$20 million in investments.

SasSec increased its suite of collective investmentproducts through the introduction of two newfunds, the Sasfin TwentyTen Fund and the SasfinSocially Responsible Fund. The former hasperformed remarkably well and as at financialyear-end, was the number one performing fund inthe country in its category. These products will behoused in SAM once it is fully operational.Discussions are also underway with EDRAM tolaunch several of their top performinginternational funds under the SAM umbrella.

SasSec acquired Worldwide Capital Limited’s 50%interest in SAM with effect from 1 March 2007,following the receipt of Financial Services Boardapproval of its Asset Manager’s licence inDecember 2006. Plans for the new financial yearinclude the SAM launch, and the introduction of arange of traded products, which should increaserevenue streams and attract new clients.

Operationally, SasSec discovered creditor fraudsamounting to approximately R3 million, asconfirmed by an independent forensic audit.The three ex-staff members concerned are facingcriminal charges and SasSec has recovered most ofthe losses from the parties concerned. Following thedeparture of these personnel, the administrationand support functions have been restructured.

Financial Planning UnitFollowing SFAS’s acquisition in 2006 of thebusiness of PIB, a long-established financialplanning consultancy based in Pretoria andJohannesburg, and the appointment of GavinCame as its Chief Executive Officer, SFAS hasfocused on the client-facing aspects of thebusiness by appointing new planners and putting

in place a reliable and replicable clientengagement process.

It is expected that with the ongoing penetrationinto the broader Sasfin client base, profitabilityin this business will improve significantly. There has already been a marked increase inreferral business between SasSec and this unit.

The introduction of SAM will also allow for closerco-operation between asset manager andfinancial planner, with the resultant revenuestream benefits to both parties, withoutincreasing price levels or reducing theindependence of advice given to the client.

SPECIALISED SERVICESContribution to headline earnings – 2007: R7,5 million (2006: R5,7 million)

This division comprises the Group’s FreightServices, Asset (Regulation 28) Consulting, Health-care Consulting, Employee Benefits Administrationand Short-term Insurance Broking units.

Freight Services UnitPremier celebrates its 30th anniversary this yearand has once again improved on its previousyear’s results by contributing commendableprofits in a very price sensitive environment.

Premier’s main business is the internationalmovement of product both in and outbound, usingall modes of transportation, which it carries outwith a high level of customer service.

Premier has continued to grow its business base andhas recently re-engineered its sales and marketingprocess to position itself for above average growth.

The cross-selling opportunities between Premier andthe Bank continue to be exploited with good results.

Asset Consulting Unit (formerly Regulation28 Consulting)This unit has been placed on a sounder and moresustainable footing, with SFAS benefiting from itssuccess in obtaining new business. Assets undermandate now exceed R1 billion, with stronger riskmanagement and compliance processes in place.It is anticipated that SAM will benefit from assetsintroduced by this unit.

Healthcare Consulting Unit This unit continued to make an excellentcontribution to SFAS in the 2007 financial yearand remains one of South Africa’s topindependent corporate healthcare brokers.


CEO’s Report

:1500:15


Employee Benefits Administration UnitPioneer, which is 30% owned by SFS, made apositive contribution in 2007. Its financial yearruns from January to December.

Short-term Insurance Broking Unit Sasfin Insurance Brokers (Pty) Limited, which iswholly-owned by SFAS, covers the short-terminsurance requirements of the Sasfin Group and afew of its clients, and effectively broke even in theyear under review. Plans are in place to scale up thisunit’s activities, with a proposed acquisition of asmall brokerage and the appointment of a dedicatedChief Executive Officer.

SUPPORT SERVICES

Marketing and Business DevelopmentThe Marketing department handles all ongoingGroup marketing initiatives including publicrelations, direct marketing, new productlaunches, events, advertising and promotionalrequirements. A new advertising agency wascommissioned as a full service agency tostrategically communicate with Sasfin’s markets,as the brand footprint continues to develop.

The Business Development department wascreated specifically to handle the Group’s cross-selling and ABI initiatives. A new CRM systemhas been introduced, the ABI programme hasbeen strengthened, and internal cross-selling hasincreased, albeit with much room forimprovement.

Information Technology The past year has seen the implementation of anumber of strategic initiatives, aimed at ensuringthe Group’s readiness for future local andinternational operations. These initiativesentailed the introduction of best-of-breedtechnologies into general use throughout theGroup, as well as specific technologies in nicheareas.

These technologies have yielded ancillary benefitsas wide-ranging as centralised unified messaging,enhanced disaster recovery and self-healingnetwork infrastructure capabilities, as well asintroducing greater levels of security and audit tothe overall environment.

The creation of a Basel II compliance framework,using the technologies introduced over the lastyear, has been widely acknowledged as aninnovation in the application of the Microsofttechnology stack in the compliance sphere, and wasrecognised as such with a published case study.

The in-house IT department has been instrumentalin supporting a large number of new and excitingbusiness initiatives and continues to be a majorstrategic enabler for the Group.

Finance and Administration Sasfin’s ongoing growth and developmentnecessitated the appointment of a GroupChief Financial Officer and on 1 July 2007, theGroup recruited Tyrone Soondarjee, a CharteredAccountant with extensive experience infinancial services.

This department is responsible for Groupaccounting and reporting, including statutoryreporting to the SARB, with whom it maintainsopen and constructive communication channels.It is also responsible for Group administration andit discharges its responsibilities with efficiencyand integrity.

ComplianceThis independent department, established andoperational in terms of Regulation 47 of the BanksAct, continues to act as a key interface with theregulatory authorities and is an essentialcomponent of the Group’s risk managementframework. Further details are provided in ourexpanded Compliance Report on page 20.

Internal AuditThe independence of this department is assured byreporting functionally to the Chairman of theAudit and Compliance committee, who is a non-executive director of Sasfin. Internal Audit hasdirect access to the Chairman of the Bank andreports administratively to the Chief ExecutiveOfficer. The department is committed to upskillingin order to keep abreast of Sasfin’s growth andexpanding range of products and services, therebyassisting management to continually upgradeSasfin’s systems and controls and maintain highlevels of risk management and compliance.

Risk and Credit Sasfin’s expansion necessitated the appointmentof a Chief Risk Officer and Maston Lane waspromoted to this position.

This department continues to play a vital role inassuring Sasfin’s success as a banking group.Sasfin’s risk management approach is based ontried and tested policies and procedures, which arere-evaluated and enhanced on a regular basis inorder to remain relevant in view of the ever-changing financial and regulatory environment.The fundamental changes to risk management,because of the planned implementation of the

Chief Executive Officer’s Reportcontinued



:1600:16

revised Banking Regulations pursuant to thepublication of the Basel II Capital Accord, are in theprocess of being successfully deployed within theSasfin environment.

Human ResourcesThis department continues to adhere to soundhuman resource policies and procedures. It seeksto attract and retain quality staff members bystriving to be an employer of choice. This isachieved by consistently promoting fair practicewithin the Group, recruiting candidates who area good fit for the job and the organisation,regularly reviewing the performance ofemployees, providing opportunities for growthand development within the organisation, andmotivating, recognising and rewarding Sasfin’speople with individually attractive remunerationpackages. This department promotes positivehuman relationships for the overall benefit ofemployees and the Group.

Attention continues to be placed on at leastmeeting the FSC human resources targets, as wellas relevant regulatory requirements in terms ofEmployment Equity and Workplace SkillsDevelopment, with new appointments, wherepossible, in line with the Group’s diversity andtransformation policies.

Employees, particularly from disadvantagedbackgrounds, have received ongoing skillsupgrading in the form of on-the-job training aswell as attending formal educationalprogrammes. Fast-tracking programmes havebeen introduced for two affirmative actionemployees with potential to grow within thebusiness. In addition, Sasfin has employed sixpeople on learnership contracts, who arementored within various divisions anddepartments of the Group.

During the year under review, the Bank receivedaccreditation to provide training to TOPPcandidates, who will be rotated through thevarious divisions and departments of the Group inorder to gain experience and knowledge. Twograduates will be registered on Sasfin’s TOPPprogramme this year.

Employee wellbeing remains a key focus area. Thisyear, employees have not only received

educational training on HIV and AIDS, but havealso been encouraged to know their HIV status.The Human Resources department arranged forvoluntary on-site testing, as well as counselling forinfected and affected personnel.

Financial Sector Charter

Sasfin continues to improve in its BEE drive andscored 52 points in its latest assessment. Sasfinhas established a Transformation committee andis committed to continue on this path.

Welcome and appreciation

I welcome Dolly Mokgatle and Shahied Rylands asnon-executive directors of Sasfin and the Bank,with whom I look forward to a long andrewarding association.

I am very grateful to each of Sasfin’s dedicated andextremely competent directors, general managersand staff members for their wonderful service to theGroup. In particular, I thank Alan Greenstein andMalcolm Segal for their sterling commitment.

I also thank Sasfin’s clients for their loyalty andsupport, and our professional advisors and theRegistrar of Banks and his office, for their soundguidance. I look forward in the year ahead tofurther enhancing the “win-win” relationshipsthat exist with all Sasfin’s stakeholders.

Roland SassoonChief Executive Officer6 September 2007


Risk Management Risk Management Report

:1700:17

RISK MANAGEMENT REPORT

Introduction

Sasfin’s risk management approach provideseffective mechanisms to address theidentification, measurement and evaluation ofactual and potential risk areas. This, combinedwith a balanced approach to risk and keeping inmind our optimum levels of risk appetite, ensuresthat we retain our entrepreneurial drive andremain able to achieve our core strategic,operational, financial and compliance objectives.

Risks can be described as the possibility thatunforeseen future events could occur whichcould impact on the ability of the Group toachieve its desired objectives.

Failure to manage substantive risk effectively andin a timely manner can have severe consequenceson business. Effective risk management thereforeremains a key focus of management processeswithin Sasfin and our risk managementframework addresses such risks as credit,funding, liquidity and interest rate risks, market,business and operational risks which includepricing, market penetration, service levels, thesecurity of our staff, assets and information,business disruption, legal documentation orcontractual risk, technology risk, settlement,payment and processing risk, reputational risk,fraud risk and compliance with regulatory andstatutory requirements risk.

Philosophy

The business of banking and financial services isconducted within an environment of complexinterrelated risks. This has become even moreapplicable with the advent of the new regulationsrelating to banks as amended for the Basel IICapital Accord, which ushers in a more risk-sensitive approach to banking than any of itspredecessors.

At Sasfin, risk management is regarded as beingone of our competitive advantages.

Our risk management programme supports theview that the management of risk is theresponsibility of all and Sasfin proactivelyidentifies risk in delivering products and servicesto the market in an efficient and cost effectivemanner. The programme also supports the analysisof problems from various angles, to identify notonly the risk mitigation, but also to anticipate andact on potential opportunities – thereby

challenging conventional wisdom and creatingbetter solutions.

Structure

Risk is managed and monitored in accordancewith the risk management framework of theboard of directors, board committees, executiveand operational management, complianceofficers and the risk management functions of theoperational units.

In addition, the Internal Audit function providesthe board and management with an independentassessment of the effectiveness of the riskmanagement processes within the Group.

The risk control framework is designed to ensure:

• the detection and minimisation of significantrisks

• the reliability of financial information

• the reliability and integrity of operationalprocesses

• compliance with statutory and regulatoryrequirements.

The key committees carrying risk managementresponsibilities are:

• Boards of directors

• Group Executive

• Directors’ Affairs (Corporate Governance)

• Directors’ Strategy and Review

• Asset and Liability

• Risk Management

• Credit Review

• Group and subsidiaries’ Audit and Compliance

• Information Technology Steering

• Human Resources and Remuneration

• Basel II Steering.

Sasfin annual report 07 fins 10/15/07 10:52 AM Page 17

Risk Management Risk Management Reportcontinued

:1800:18

ERM

ERM is a process implemented by an entity’sboard of directors, management and otherpersonnel, and is applied in strategy settingacross the enterprise. It is designed to identifypotential events that may affect the entity and tomanage risks remaining within its risk appetite toprovide reasonable assurance regarding theachievement of entity objectives.

Sasfin’s ERM, which has been rolled out across theorganisation, supports the Basel ll Capital Accordimperatives relative to the determination andalignment of strategic objectives, capitalrequirements and risk management.

Sasfin’s approach to the management of key riskareas is as follows:

Credit riskRepresents the risk of loss incurred directly byproviding credit or indirectly by assuming afinancial obligation or by becoming exposed tocounterparty failure.

Credit risk exists in both on- and off-balancesheet exposures and may arise from the non-performance by a borrower, counterparty or anissuer such as a securities firm.

Credit risk management processes are governedby the Group’s credit policy guidelines. Theseguidelines are reviewed regularly and anyamendments thereto are subject to theevaluation and approval of the Credit Reviewcommittee. Facilities granted to counterpartiesare governed by internal and prudential limitswhich restrict large exposures relative to theGroup’s capital.

Large facilities are approved by the Credit Reviewcommittee with facilities above R16 millionrequiring approval by the board of directors.

Counterparty creditworthiness is evaluated interms of policy guidelines and limits are set beforecredit is granted.

Risk mitigation includes:Trade finance Various types of collateral are

obtained to secure theexposure but the primarysecurity is usually NotarialBonds over movables and

ownership over goodsfinanced.

Debtor finance Various types of collateral areobtained to secure theexposure but the primarysecurity is usually thereceivables purchased.

Equipment The primary security is theasset being financed.

The impairment policy of the Group isconservative and satisfies regulatoryrequirements.

Liquidity riskRepresents the risk arising from the potentialinability of the Group to accommodate decreasesin liabilities or to fund increases in assets in full atthe right time, place and currency.

This area of risk is closely monitored by the Assetand Liability committee and is managedaccording to the policies of the committee and inaccordance with the following process:

• maintenance of balance sheet liquidity ratios

• assessment of depositor concentration in termsof the overall funding mix

• ensuring an adequate portfolio of marketableassets and short term investments, and

• liquidity contingency plans relevant tochanging needs.

Interest rate riskRepresents the risk that fluctuating interest ratescould unfavourably affect the Group’s earningsand the value of its assets, liabilities and/orcapital.

This area of risk is closely monitored by the Assetand Liability committee which approves thepolicies and limits for the management of interestrate risk and monitors these exposures and theeffectiveness of the risk management processes.

Group Domestic Treasury’s responsibility is toestablish and maintain an interest rate riskmanagement framework and to recommendappropriate risk limits.

Market riskRepresents the risk of loss due to adversemovements in the market, for example, where


:1900:19

RISK MANAGEMENT REPORT

Risk Management Risk Management Reportcontinued

interest rates rise because of changes in suchfactors as exchange rates, inflation and marketliquidity.

Approach:

• The board of directors grants general authorityto undertake market risk. Limits are set forindividual business units to contain losseswithin specified limits in the event of adversemarket movements

• Prospective investments require formalauthorisation and have to undergo dealsanctioning. Market risk from investments ismanaged in accordance with its purpose andstrategic benefit. Periodic reviews andreassessments are undertaken

• Limited foreign exchange risk arises due to thelow value of such transactions. It is Grouppolicy not to have any material uncoveredforeign exchange transactions.

Operational riskRepresents the risk of loss resulting frominadequate or failed internal processes, peopleand systems and/or from external events.Operational risk incorporates legal risk.

Operating risk includes, amongst others, thepotential for loss arising from flaws ormalfunctioning in automated systems, businesscontinuity planning, failures in internal financialand administrative controls and non-compliancewith Group policies and procedures.

Control mechanisms have been established withinthe different divisions to manage operational risk.Divisional management apply their specialisedknowledge of the markets in which they operateto fine-tune their risk control procedures andsystems of internal control.

Basel II capital accord

The Basel II Steering committee ensures that wetimeously comply with all relevant requirements.

Sasfin’s detailed implementation project isentering its final stages and will ensure thealignment of our overall risk managementstrategies and processes, which includes theInternal Capital Adequacy Assessment Processwith best practice and the Basel II framework.

Sasfin has received favourable quality assessmentreviews from both internal and external audit onthe overall project management, as well as thecontent and level of compliance of the Basel IIimplementation.

Sasfin will be in a position to commence theparallel run testing in October 2007, in line withthe requirements of the SARB.

Internal audit

Internal Audit is an independent, objectiveassurance and consulting activity designed to addvalue and improve an organisation’s operations.

It helps an organisation accomplish its objectives bybringing a systematic, disciplined approach toevaluate and improve the effectiveness of riskmanagement, control and governance processes.

The Sasfin Internal Audit function utilises riskbased audit methodologies and standards that areconsistent with the Standards for the ProfessionalPractice of Internal Auditing as advocated by theInstitute of Internal Auditors.

This department has performed effectively overthe past 12 months and we are satisfied that theyadd value to the Group.


Compliance ReportCompliance Report

:2000:20

Introduction

Sasfin’s independent compliance function hasbeen established in terms of Regulation 47 of theBanks Act and operates in terms of the overallapplicable legislative and regulatory framework.The objective of the function is to ensure thatSasfin continuously manages its regulatory andstatutory risks and complies with applicable laws,regulations and supervisory requirements. At thestrategic level Sasfin sees compliance as a toolsupporting an effective level of corporategovernance within the organisation.

Over the last few years, banks have been facedwith a veritable raft of new regulation andregulatory changes, which has placed considerableadditional pressure on them and indeed theirclients to ensure that they satisfy the demands ofthe regulatory environment. Arguably, thisincreased workload has had a disproportionateimpact on smaller banks such as Sasfin.

Sasfin’s compliance function operatesindependently from the overall risk managementfunction, which has itself been bolstered tofacilitate the additional responsibilities arisingfrom ERM, the imminent implementation of Baselll and the increasingly sophisticated riskenvironment. This structure supports best practiceprinciples and has strengthened Sasfinmanagement of both Risk and Compliance.

The Financial Intelligence Centre Act in particularimposes onerous requirements relative to theidentification of clients and the reporting ofsuspicious transactions. As from 30 September2006, low risk clients have also been subject tothe same verification requirements thatpreviously applied to all other risk categories ofclients. As at June 2007, Sasfin has managed toachieve a compliance level of 99%. All remainingaccounts have been frozen in accordance withthe applicable regulations.

The compliance division also oversees andmonitors the process of transformation withinSasfin. This process is guided by the provisions ofthe FSC. The FSC came into being in August 2002following a Nedlac Financial Sector Summit.During the year under review, the FSC wasgazetted as a sector code in terms of the BroadBased Black Economic Empowerment Act. The keyobjectives of the FSC were to commit the financialsector to “actively promoting a transformedvibrant and globally competitive financial sectorthat reflects the demographics of South Africaand contributes to the establishment of anequitable society by effectively providingaccessible financial services to black people andby directing investment into targeted sectors ofthe economy.”

Sasfin has submitted an audited report to the FSCCouncil in the year under review. Sasfin has madesubstantial progress towards achieving the 2008targets contained in the Charter, which have beenbolstered considerably by the Circle Capitaltransaction mentioned in the Chairman’s Report.Worthy of note is that it has achieved its targets inrespect of ownership and corporate socialinvestment and is on track to achieve itsprocurement and board representation targets bythe end of the current calendar year.

The much publicised NCA is now fully in force.Sasfin has registered as an authorised creditprovider and has updated its procedures andprocesses to meet the requirements of the NCA.Whilst the regulatory framework surrounding theNCA is indeed onerous, it is to be noted that theNCA is primarily aimed at the protection of theindividual consumer, who falls outside Sasfin’starget market. Unlike the retail banks, Sasfin doesnot therefore expect the NCA to impact on thedemand for credit placed upon it.


:2100:21

COMPLIANCE REPORT

Compliance ReportCompliance Reportcontinued

General

In terms of Regulation 39 of the Banks Act, theBank’s board of directors is required to report tothe Registrar of Banks on the effectiveness of thesystem of internal controls relating to financialand regulatory reporting and their compliancewith the Banks Act and Regulations.

To the best of their knowledge, the relevantboards of directors are of the opinion that thereare no indications of any material breakdown inthe functioning of these controls, procedures andsystems, during the period under review.

While the cost of compliance is increasing inparallel with the escalating regulatory load,Sasfin believes that a rigorous compliance regimeis essential to the future wellbeing and strategicdevelopment of the Group.


Corporate GovernanceCorporate Governance Report

:2200:22

Introduction

Sasfin prides itself on being a good corporatecitizen, recognising that effective corporategovernance practices are essential to achievingand maintaining trust and confidence in both theorganisation and the banking system as a whole.Sasfin actively manages its corporate governancethrough the relationships between management,the boards of directors, shareholders and otherstakeholders. To this end, Sasfin endorses theprinciples incorporated in the Code of CorporatePractices and Conduct as set out in the King IIReport which forms the basis upon which theGroup’s commitment to sound corporategovernance is pursued. Sasfin also endorses theFSC in order to raise the skills and fullyincorporate the enormous talent of thepreviously disadvantaged members of the SouthAfrican society. The various committees of theboards of directors are charged with monitoringand evaluating conformity with the provisions ofthese requirements, as well as the InternationalFinancial Reporting Standards, the requirementsof the JSE, the Banks Act and all the other statutesand regulations to which the Group is bound. Thisensures integrity, accountability, transparencyand equal opportunity in the conduct of theGroup’s various business enterprises.

Regulatory environment

Given the important financial intermediation roleof banks in a sophisticated economy, their highdegree of sensitivity to potential difficultiesarising from ineffective corporate governanceand the need to safeguard depositors’ funds,corporate governance for banking organisationsis of great importance to both local andinternational financial systems and meritstargeted supervisory guidance.

The SARB, through its Bank SupervisionDepartment, carries the responsibility forensuring that a sound and well-regulated bankingsystem exists in South Africa and that prudentrisk management practices are embedded withinthe banking environment. The directors of a bankare required in terms of the Banks Act to reportannually to the Registrar of Banks on the efficacyof the systems of internal control and to providereasonable assurance as to the integrity andreliability of the financial statements, as well ason Corporate Governance. Additionally, the

directors are required to safeguard, verify andmaintain accountability for the Bank’s assets.

Sasfin is committed to adherence to and applicationof high standards of corporate governance. Thesenior management and boards of directors ofSasfin take their responsibilities of ensuringeffective corporate governance seriously.

Sasfin, from time to time, reviews its corporategovernance to ensure compliance with currentaccepted best practice corporate governanceprinciples.

Sasfin is mindful that it operates on the basis ofcontinuous improvement, especially given theever evolving governance standards in SouthAfrica and internationally.

Sasfin has a compliance programme which isunder the control of a General Manager whoreports to the Chief Executive Officer and whohas unrestricted access to the Chairman of theAudit and Compliance committee. The JSEregulates the activities of SasSec. SFAS also fallsunder the regulatory arm of the Financial ServicesBoard. Both SasSec and SFAS employ dedicatedfull time compliance officers who ensure thatappropriate standards are maintained.

The directors bear responsibility for setting andmaintaining the Group’s systems of internalcontrols and protecting its assets and earningsagainst material financial loss. They arecommitted to discharging these responsibilities ascost-effectively as possible. Business risks areassessed on an ongoing basis and riskmanagement procedures are modified andimplemented as needed. The Group has acomprehensive reporting system which ismonitored and reviewed monthly by managementand the directors. The system facilitatesbudgetary control, provides reasonable assuranceas to the accuracy of financial statements andsafeguards the Group’s assets. The Group ispreparing for Basel II as stated elsewhere in thisreport.

The King II Code of CorporatePractices and Conduct

The boards of directors of companies in the Groupare committed to maintaining the standards ofintegrity and openness detailed in the Code ofCorporate Practices and Conduct recommended in


:2300:23

CORPORATE GOVERNANCEREPORT

Corporate GovernanceCorporate Governance Reportcontinued

the second King Report on Corporate Governance.Sasfin adheres both to the specified provisions ofthe King Code and to its underlying principles offairness, transparency, accountability, socialresponsibility and environmental consciousness.

The boards of directors

The responsibilities of the Group’s boards ofdirectors include reviewing and guidingcorporate strategy, risk propensity, budgets andbusiness plans. These boards meet regularly tomonitor executive management and therebyretain full and effective control over theiroperations. The Chairpersons of the Company,the Bank and its main subsidiaries are all non-executive directors. These boards include non-executive directors of sufficient calibre,experience and number for their views to carrysignificant weight in business decisions. Thevarious boards are responsible for setting policy,monitoring corporate performance andoverseeing major capital expenditure. Wherenecessary, independent professional advice iscanvassed. The Company Secretary ensures thatstatutory and other procedures are followed.

Sasfin Holdings Limited and SasfinBank Limited Board charters

The boards subscribe to good corporategovernance and strive to be effective inmanaging and controlling the companies. As abank-controlling company or bank, the boardsrecognise that they are bound by the Banks Actand as such, consist of both executive and non-executive directors (including independentdirectors) appropriate in terms of the Act. Theconcept of a unitary board, consisting ofexecutive directors, with their intimateknowledge of the business, and non-executivedirectors, who can bring a broader view to theCompany’s activities, particularly those who haveintimate knowledge of banking and financialservice industries, remains the favoured boardstructure. Management of business risk and theexercise of commercial judgement are the essenceof this mutual association and exchange ofbusiness experience and knowledge. The boardsaccept they have a collective responsibility toprovide effective corporate governance thatinvolves a set of relationships between

management, the boards, shareholders and otherrelevant stakeholders, in a manner whereby theboards:

• determine the entity’s purpose and values

• determine the strategies to achieve the entity’spurpose (that is, its strategic intent andobjectives as a business enterprise) and toimplement its values (that is, its organisationalbehaviour and norms to achieve its purpose) inorder to ensure that it survives and thrives

• exercise leadership, enterprise, integrity andjudgement in directing the entity so as toachieve its continuing prosperity

• ensure that procedures and practices are inplace that protect the entity’s assets andreputation

• monitor and evaluate the implementation ofstrategies, policies, management performancecriteria and business plans

• ensure compliance with all relevant laws,regulations and codes of best business practice

• ensure that technology and systems used areadequate to run the business properly and for itto compete through the efficient use of itsassets, processes and human resources

• identify key risk areas and key performanceindicators in order to generate economic profit,so as to enhance shareholder value in the longterm and recognise the wider interests of society

• regularly assess performance and effectivenessas a whole and that of individual directors,including the Chief Executive Officer, and

• ensure that the entity has developed asuccession plan for its executive directors andsenior management.

The boards strive to focus on performance indirecting the commercial and economic fortunesof the entity. The boards recognise that enterpriseis the disposition to engage in undertakings of riskand are constituted in a manner that provides abalance between enterprise and control. Alldirectors recognise that absolute integrity isnecessary to meet their onerous obligations andresponsibilities.



:2400:24

The boards comprise a balance of executive andnon-executive directors, with a majority of non-executive directors, of whom sufficient areindependent of management for minorityinterests to be protected and conform to the“four-eyes” principle as required by the SARB.The boards also take cognisance of gender andracial mix.

The boards are selected from individuals ofintegrity from a broad range of backgrounds, whocan bring a blend of knowledge, skills, objectivity,experience and commitment to the board underthe firm and objective leadership of a chairpersonwho is a non-executive director, and who acceptsthe responsibilities and duties that the post entailsand who provides the direction necessary foreffective boards. Non-executive directors areappointed for a three-year period and are notautomatically re-appointed.

The boards strive to exercise objective judgementon the corporate affairs of the business enterprise,independent from management, and insist onsufficient management information to enable aproper and objective assessment to be made by thedirectors collectively. The boards guide and set thepace of the entity’s operations and futuredevelopments. In so doing, the boards regularlyreview and evaluate the present and futurestrengths, weaknesses and opportunities of, andthreats to the entity. Comparisons withcompetitors, locally and internationally, and bestpractice are major ingredients in this process –especially in the era of the global economy and therapid transmission of information electronically.

The boards recognise that transactions betweenthe entity and its managers, directors and large ordominant shareholders are rife with potentialconflicts of interest. The personal interests ofdirectors, or persons closely associated withthem, do not take precedence over those of theentity and its shareholders. All directors avoidconflicts of interest, even where these can onlybe perceived to exist. Full and timely disclosure ofany conflict, or potential conflict, are madeknown to the board. Where an actual or potentialconflict does arise, on declaring their interest, adirector may participate in the debate and/orvote on the matter, but must give carefulconsideration to his/her integrity in suchcircumstances and the potential consequences itmay have for the board, the entity andthemselves personally, but in any major issue areexpected to recuse themselves.

Any director with a substantial interest in theentity, such as a major shareowner, is expected torecognise the potential for a conflict of interestand accept that his/her primary duty andresponsibility is to always act in the interests ofthe Company. The boards, in motivatingmanagement and employees effectively andproductively, promote a culture that supportsenterprise and innovation with appropriateshort- and long-term performance relatedrewards that are fair and achievable. The boardsseek to drive the business enterprise proficientlythrough proper and considered decision-makingprocesses, and recognise entrepreneurialendeavour amongst their management withoutcontravening laws and regulations. However,prudent risk management is the essence of alldecision making.

The boards recognise that companies do not actindependently from the societies in which theyoperate. Accordingly, corporate actions arecompatible with societal objectives concerningsocial cohesion, individual welfare and equalopportunities for all. At times, however, a trade-offis considered between short-term social costs anddecisions that derive longer-term benefits for theentity and thereby those having an interest in it.

The boards determine a policy for the frequency,purpose, conduct and duration of their meetingsand those of their formally establishedcommittees. They also adopt efficient and timelymethods for informing and briefing boardmembers before meetings. The information needsof the boards must be well defined and regularlymonitored. Each member is allowed to play a fulland constructive role in the boards’ affairs andhas a responsibility to be satisfied that the boardshave been furnished with all the relevantinformation before making a decision. The boardsmeet at least once a quarter and more frequentlyif necessary, and make use of board-appointedcommittees to assist the managing of thebusinesses on a more frequent basis. Minutes ofthese meetings are circulated to all boardmembers.

Board committees

The boards have established the followingcommittees and ensure that each committee(other than Executive Management) is chaired bya non-executive director and has a membership ofa majority of non-executive directors, except for


:2500:25



the Credit Review committee, as large exposuresare agreed by the boards:

• Group Audit and Compliance

• Executive Management

• Risk Management

• Directors’ Affairs

• Human Resources and Remuneration

• Directors’ Strategy and Review

• Asset and Liability

• Information Technology Steering

• Credit Review

• Basel II Steering

• Transformation.

These committees conform to statutoryrequirements, where applicable. Furthermanagement committees, as required, areapproved by the boards.

The boards define their own levels of materiality,reserving specific powers to them and delegatingother matters to the committees andmanagement with the necessary writtenauthority. Any such delegations by the boardshave due regard for the directors’ statutory andfiduciary responsibilities to the Group, whiletaking into account strategic and operationaleffectiveness and efficiencies.

The strategies, policies, mutually agreedmanagement performance criteria and businessplans of the entities are clearly defined andreliable measurements have been put in place.The directors implement a risk framework whichensures comprehensive assessments againstaccurate and relevant financial and non-financialinformation, as appropriate, and which areobtainable from the Group’s own internalreporting systems as well as from externalsources, so that an informed assessment can bemade of all issues facing the boards. Accordingly,the boards ensure that internal controlprocedures provide reliable and valid informationfor monitoring and evaluation. The internal

controls include not only financial matters, butalso operational and compliance controls andmanagement of the business risks associated withthe entity.

Non-executive directors

In addition to three executive directors and a non-executive Chairman, the boards each consist of afurther five independent non-executive directors inthe case of the Company and the Bank. Non-executive directors offer independent judgementto management and, other than their fees, and insome cases shareholdings, there are no extraneousfactors that might materially influence theirjudgement. If there is an actual or potential conflictof interest, the non-executive directors concernedare excused from the related decision-makingprocess. The non-executive directors’ fees aremarket related and reflect their committed timeand levels of responsibility. Non-executivedirectors are selected through a formal process andwhen new non-executive directors are appointedby existing directors, such appointments requireconfirmation at the next Annual General Meeting.Non-executive directors are appointed for specificterms and their re-appointment is not automatic.

Executive directors

There are three executive directors on the boardof the Company and the Bank, namely the ChiefExecutive Officer, the Managing Director and afurther executive director responsible forCorporate Finance and Private Equity. A cleardemarcation exists between the executivefunctions of these directors and the functions ofthe non-executive Chairman of the two mainboards. The boards’ HR and Remunerationcommittee determines the emoluments andperquisites of executive directors.

The Group Audit and Compliancecommittee

The Group Audit and Compliance committee ischaired by an independent non-executive director,and includes a further two independent non-executive directors.

The executive directors, the Chief FinancialOfficer, the Chief Risk Officer, General ManagerCompliance, the Internal Auditor and the ExternalAuditors attend the committee by invitation and



:2600:26

have unrestricted access to the committeeChairman.

With the agreement of the SARB, the mandate ofthe committee has been expanded to covercompliance matters over and above the followingresponsibilities:

• ensuring the effectiveness of the systems ofinternal control

• ensuring that appropriate systems exist tovalidate the integrity of the accounting andfinancial systems

• assessing the effectiveness of the internal auditrisk and compliance functions, and

• reviewing the scope and quality of the externalaudit

This committee also reviews any internal mattersraised in the key risk committees mentioned inthe Risk Management section of this document. Inaddition SasSec, SFAS and Premier also have Auditcommittees which report into the Group Auditand Compliance committee.

Internal Audit

The Internal Audit function reportsadministratively to the Chief Executive Officerand functionally to the Audit Committee. TheChairman of the Audit and Compliancecommittee meets separately with the InternalAuditor on a monthly basis, and with the ExternalAuditors on a quarterly basis. In addition, theInternal Auditor has direct access to theChairman of the Group Audit and Compliancecommittee should the need arise.

Group Risk Management committee

The Group Risk Management committee is chairedby an independent non-executive director andincludes a further independent non-executivedirector and the Chief Executive Officer.

Directors’ Affairs committee

The Directors’ Affairs committee is chaired by anon-executive director and includes a furtherthree independent non-executive directors.Boards and board committees all undertake self-assessments annually in order to ensure highgovernance standards.

The Group Executive Management committeeconsists of all executive directors and seniormanagement and, by invitation, the Sasfin boardChairman and two independent non-executivedirectors. These meetings enhance transparencyand good corporate governance, share informationand significantly enhance good corporategovernance and understanding of the business.

In addition to the above, the Company’s boardhas appointed independent non-executivedirectors to the following boards, which meet atappropriate intervals:Sasfin Securities (Pty) LimitedSasfin Financial Advisory Services (Pty) Limited.

Human Resources andRemuneration committee

Due to the size of the organisation, the Group hasa combined HR and Remuneration committee,which functions as a single committee of theCompany and the Bank boards respectively:

• The committee assists the board in providingmanagement with guidance on the adequacy andefficiency of remuneration and HR policies,procedures and practices that are applied withinthe Group

• These policies, amongst others, cover thefollowing aspects

– conditions of and remuneration for theappointment of both executive and non-executive directors (the Directors’ Affairscommittee attends to appointments,performance and succession plans for positionsin this category)

– conditions of and remuneration forappointment of senior management, and

– guidelines for the appointment of othermanagement and personnel


:2700:27



• Comprehensive HR policies, which include thosematters dealt with in the FSC related to blackempowerment and employment equity

• Comprehensive procedures which ensurecompliance with laws and regulatoryrequirements and which ensure that structuresare in place which enable agreed policies to becarried out effectively in:

– Empowerment– Staff training and development– Promotions– Identification of key people– Succession planning of key posts below

executive director level– Performance reviews, salary and commission

payments– Disciplinary hearings and employment

termination– Recruitment– Employment equity.

The committee consists of two non-executivedirectors (one as Chairman) for a periodconcurrent with their term of appointment to theboards of directors. In addition, the GroupManaging Director also serves on the committee.

Directors’ emoluments, interests and shareoptions are shown on pages 34, 35 and 85 ofthis report.

The record of attendance at board and committee meetings for the Sasfin Group for 2007 is as follows:

Human Group Direc-Resources Audit tors’

and and Risk Asset Direc- StrategySasfin Sasfin Remune- Com- Manage- Credit and IT tors’ and Basel II

Holdings Bank ration pliance ment Review Liability Steering Affairs Review SteeringLimited Limited com- com- com- com- com- com- com- com- com-board board mittee mittee mittee mittee mittee mittee mittee mittee mittee

Meetings planned 4 4 4 4 4 11 11 4 4 11 11

Meetings held 7 6 4 4 5 11 12 3 4 8 9

DIRECTORS:CN Axten 6 5 – 3 5 9 10 – 4 8 –

ETB Blight 7 6 – 4 5 4* 12 3 4 8 9

MB Glatt 7 6 4 – – – – – 4 7 –

AW Greenstein 7 6 4 – – – – 3 – 7 9

DD Mokgatle*** 6 5 – – – 4 4 – – – –

D Paizes ** 2 4 1 2 – – – 1 – – –

MS Rylands*** 7 6 4 3 – – 7 3 – – –

RDEB Sassoon 7 6 – – 4 11 12 3 – 8 9

M Segal 7 6 – 4 – – – – – 7 4

ML Smith 7 5 – – – – – – 4 – –

*Attends meetings on a quarterly basis only and as an alternative Chairman in need.** D. Paizes resigned as a director of the Company and the Bank at the Annual General meeting in December 2006.*** Appointed to the committees during the year and therefore shows low attendance.Where no attendance is recorded, the director concerned is not a committee member.


SustainabilitySustainability Report

:2800:28

Introduction

Sasfin is acutely aware of the role of business insociety. It has therefore embraced business ethicswithin integrated sustainability reporting byadopting the “triple bottom line” sustainabilityreporting relating to the environment, societyand the economy. Many of the issues arising fromthe adoption of the sustainability reportingstructure have been incorporated into the FSC. Asa responsible corporate citizen, a regulatedinstitution and a signatory to the FSC, Sasfin iscommitted to implementing the requisitepractices and policies throughout theorganisation in a meaningful and appropriateway for the long-term benefit of the Group, itsvarious stakeholder groupings, the environmentand the community in which it exists.

The South African banking and financial servicessector is dominated by a few very large entities.Although Sasfin’s scale of operations isconsiderably smaller than most of its peers, it hasnevertheless achieved much and is proud of whatit has achieved in the context of corporate socialinvestment and sustainability. It has a longhistory of positive interaction with the widercommunity which has always positively reflectedthe moral conscience of the Group.

The Group is committed to creating anddeveloping social capital through informalnetworks, accumulated know-how and trust thatmake Sasfin effective. This is the product of manyinterrelated policies and practices.

Shareholders

Sasfin has historically adopted a policy oftransparency in relation to both formal andinformal shareholder communication, as well asinterfacing with potential shareholders, analystsand the media. Sasfin consistently strives toimprove its annual report and make it more user-friendly and meaningful. However, Sasfin doesnot limit its shareholder communication to itsreport. Sasfin has a formal investor relationsprogramme. It also has in place a regularprogramme of media intervention, where it seeksto develop closer relationships with mediamembers and to assist them in understanding andappreciating the nuances of the Group. Withinthe parameters of the applicable regulations, theGroup’s Chief Executive Officer regularlyresponds to approaches from shareholders, themedia, financial analysts and other interested

parties for information about the Group and itsoperations. The Group is proud to have receivedthe Squirrel award for best annual report in itscategory.

The Group continues to work on improving itssegmental reporting and on creating an accuratepicture of its sources of business, capital and costallocations amongst business units and the viabilityof each business unit within the context of theoverall Group. This should help to further explainthe Group’s performance to investors.

Sasfin also adheres to the Promotion of Access toInformation Act (2 of 2000) and has created acomprehensive manual to give effect to theseresponsibilities.

Clients

Sasfin, as a banking and financial services group,attracts a diverse range of clients across itsbusiness units. Sasfin services both companiesand individuals through its specialist banking andfinancial service activities. Sasfin’s core tradefinance facilities have been offered to clients formore than a quarter of a century and its stock-broking and portfolio management activities formore than a century. Sasfin recognises thediversity of its target markets and the differentrequirements of its client bases, while at the sametime employing strategies to enhance its cross-sellratio and to retain and attract new clients.Sasfin’s client base reflects the demographics ofSouth Africa, particularly with regard to creditextension within the SME sector.

Historically, Sasfin has focused on the SMEmarket in terms of its core lending activities andon the HNWI market in terms of its wealthmanagement activities. It sees a virtual circlebetween the two, with HNWIs providing a steadyand reliable source of funding for the Bank’slending activities. This circle has expanded andbroadened significantly over the past year.

Sasfin considers itself a specialist in its targetmarkets, which are growth areas in which Sasfinwill continue to participate. Sasfin is committedto facilitating the growth of the SME sector whichis an essential component of the South Africaneconomy and which must flourish if South Africais to achieve the growth targets required toreduce unemployment and poverty as outlined bygovernment. Sasfin is proud to focus on this vitalsector, which is not adequately catered for by thebig banks.


:2900:29

SUSTAINABILITY REPORT

SustainabilitySustainability Reportcontinued

Sasfin has been able to broaden its range ofproducts and services and thereby embrace thewider needs of its markets. Approval as anAuthorised Dealer in Foreign Exchange has beenobtained and Sasfin has established its ownforeign exchange trading desk and is activelygrowing its offshore client base. The Bank has alsobeen accredited in its own right, as an authorisedFinancial Services Provider by the FinancialServices Board which complements and has addedboth skills and resources to Sasfin’s WealthManagement division. Sasfin’s wholly-ownedHong Kong registered subsidiary, SAL, has beensignificantly enlarged and it has appointedMr Gary Patterson as its Managing Director. SAL isnow in a position to attract a significant range ofnew clients and offer an expanded range ofservices. It is anticipated that SAL will continue toprudently consider extending its existing range ofservices where opportunities exist.

Sasfin has regular client interactions, including amonthly Asset Management Forum at whichinvestment issues are profiled, a businesspersons’networking club (held approximately every sixweeks), client lunches and cocktail functions,client visits undertaken by senior managementand regular client newsletters. These interactionsare not only designed to raise awareness of Sasfinin the community, but also serve to educateclients and improve the overall standard ofbusiness in the wider community.

Sasfin sponsors a programme, known as “The SMEScene”, on Classic FM and Business Day in order toeducate the SME sector on commercial andfinancial matters. Sasfin also works closely withmany auditors and financial intermediaries toenable them to increase their product offering toinclude Sasfin’s range of products.

Sasfin understands that its clients largely measureit in terms of its service levels. Its size, structureand approach allow it to offer a personal service– unique in many ways – and to develop a deepunderstanding of its clients’ financial needs.Sasfin subscribes to the Code of Banking Practiceand submits to the jurisdiction of theOmbudsman for Banking Services. Sasfincurrently uses the services of an externalindependent market survey specialist toundertake client satisfaction surveys aimed atimproving product and service quality.

Staff development

Employee development, well-being andtransformation are critical success factors for theGroup. Sasfin recognises that its human resourcesand intellectual capital are its most valuableresources and it has implemented policies andpractices focused on enhancing the standard ofits human resources, improving capacity andrecognising and rewarding achievement.

Employee development does not of course exist ina vacuum. Sasfin is aware of the historicimbalances which still exist in South Africansociety. Sasfin has created a Transformationcommittee to deal specifically with legislationwhich has been put in place since 1994 and whichdeals with redressing past imbalances,particularly the Employment Equity Act and theSkills Development Act. The status of thiscommittee has been upgraded to that of a boardsubcommittee, operating under the chairmanshipof one of Sasfin’s non-executive directors, DollyMokgatle. The board will continue to formulate,monitor and review all aspects of the Group’sbroad based BEE policies and ensure that theGroup aligns its employment policies with theFSC’s targets and enhances cultural diversity andgender sensitivity.

In the financial year under review, the Group’sheadcount increased to 496. This is in line withSasfin’s organic growth. Staff turnover for theyear was 1,55%, well within the average for thebanking sector.

Various incentive and reward programmes,including the Group’s Share Option Scheme, arein use at Sasfin aimed at rewarding excellentperformance. Allocations in terms of this schemeare dealt with elsewhere in this Annual Report.

Sasfin has applied considerable resources totraining. Internal training courses have beendeveloped and are offered to staff. Externaltraining is also offered and encouraged. These areboth work function specific and focused on selfdevelopment. Sasfin’s dedicated training facility,equipped with the latest technology and trainingaids, continues to be well utilised.



:3000:30

Sasfin currently has two staff members studyingfor an MBA or other post-graduate qualifications.It is also proud that one of its staff membersqualified with an MBL in the year under review.Sasfin has also created specific training modulesto ensure that staff are able to meet the demandscreated by the implementation of Basel II.

Sasfin has embraced the concept of learnerships.It has successfully employed two former learnersand currently has three mentored positions andthree learnerships. Two learnerships also exist atPremier. Sasfin has continued its association withthe He’atid leadership programme and sent anadditional three Sasfin staff members to Israelduring June 2006.

Sasfin acknowledges the huge impact thatHIV/AIDS has had and will continue to have onthe South African economy, on its socialstructure and on its workforce, and is committedto contributing towards combating this scourge.Thankfully Sasfin has had only very few HIV/AIDScases amongst its staff. The Group has formulatedand implemented an HIV/AIDS policy under theauspices of its HR department. It offerscounselling to staff who are exposed to HIV/AIDSsufferers within their family units and supportsmany HIV/AIDS related charitable and otherconcerns through its Corporate Social Investmentprogrammes. Sasfin has also taken a proactivestance and has implemented AIDS awarenesscourses for staff. It is anticipated that, due to therelatively high educational level of most ofSasfin’s staff, and the well documentedcorrelation between HIV/AIDS and loweducational levels, the prevalence of the scourgeamong Sasfin’s staff will be markedly lower thanthat prevailing in the general South Africanpopulation.

The FSC

Sasfin is committed to the FSC and its principles oftransformation. During the year under review theGroup appointed two black directors to its mainboard. Sasfin now complies with the currentownership targets specified in the FSC. Sasfin hasidentified an additional two black directors whomay soon be appointed, subject to regulatoryapproval, as a consequence of the Circle Capitaltransaction.

The General Manager Compliance, together withthe HR Manager and the Transformationcommittee, are tasked on behalf of the boardwith ensuring compliance in terms of work-forcerestructuring, procurement and otheroperational areas. The Group has submitted itssecond annual report to the FSC council. Itsoverall scores reflect substantial progress towardsthe FSC targets. Sasfin has received positivefeedback from the FSC council which will enableit to refine its programmes. Sasfin appointedexternal auditors to verify its most recentsubmission to the FSC, who have been able toprovide all stakeholders with the assurance thatour scorings model accurately reflects theGroup’s progress in this field. The FSC stillconflicts in a number of areas with the Codes ofGood Practice published by the Department ofTrade and Industry and a process of alignment,driven by relevant stakeholders, is currentlyunderway. Once this exercise has been completedSasfin will be able to fine tune its policies wherenecessary.

39% of Group staff and 26% of management staffconsist of previously disadvantaged individuals.Women comprise 70% of the Group’s total staffcomplement. These figures, when broken downfurther, reflect that 12,5% of senior management,18% of middle managers and 50% of juniormanagement consist of previously disadvantagedemployees. The Group EXCO monitors theachievement of target objectives on a monthly basis,and the Sasfin board reviews progress at its quarterlymeetings.

Sasfin has already adapted its procurementpolicies to align with the requirements of the FSC.Sasfin expects its empowerment score to improvemarkedly in the coming year as more of itssuppliers are themselves rated in terms of theCodes. A dedicated procurement manager hasbeen appointed to manage this process andimprove efficiencies.

Sasfin will continue to identify and supportappropriate black empowerment initiatives andopportunities in all areas of its business activities.


:3100:31

SUSTAINABILITY REPORT


Government and regulators

Sasfin strives to be a moral and law abidingcorporate citizen. It supports democracy but doesnot contribute to any specific political party.Sasfin’s personnel are free to determine their ownpolitical party affiliations.

Sasfin puts considerable effort into buildingconstructive and transparent relationships withits regulators, the primary relationship being withthe Registrar of Banks and his department ofbanking supervision at the SARB. In addition,Sasfin is regulated by the JSE and the FinancialServices Board of South Africa.

Sasfin complies with the listing requirements ofthe JSE and ensures compliance on an ongoingbasis as required from time to time by changes tothose requirements.

The Bank has obtained SARB’s approval for aForeign Exchange Licence and a Financial ServicesProvider Licence.

Social responsibility

For South Africa to succeed as a winning nation,it must foster the development of entrepreneurialbusinesses. This has become a neglected marketsegment following the demise of most small tomedium sized banks and the big banks’ focus onthe mass and mature business markets. Sasfin isone of the few South African banks geared toproviding the personalised service that thismarket needs and in so doing, plays a meaningfulrole in the development of the South Africaneconomy and the broadening of opportunities fornew business people, many of whom werepreviously marginalised from the mainstreameconomy.

The Group gives back to the community bysupporting worthy institutions that areefficiently controlled and ensuring that the fundsreach those in need.

Sasfin supports a number of programmes aimed atthe upliftment of the disadvantaged, as well asother worthwhile social causes, including:

• ORT

• Soul City

• The Tomorrow Trust

• MaAfrika Tikkun

• The Miracle Drive Trust

• Agathuto Education

• Johannesburg Child Welfare Society

• The SA Brain Research Institute

• Business Against Crime

• Mouth & Foot Painters

• Cycalive

• Women of the World

• Pillars of the Community

• Chubby Chums.

The environment

Sasfin is committed to the sustainable use of theworld’s scarce resources. Sasfin has committeditself to improving the energy efficiency andutilisation of power at its premises. Sasfin hasinstalled modern energy efficient backupgenerators at its head office and ensures that allits electric and electronic equipment complieswith international emission and energy savingstandards.

Sasfin has a policy of withholding financialassistance from any organisation that it considersto be engaged in socially, morally orenvironmentally reprehensible activities.


Directors’ ResponsibilityDirectors’ Responsibility Statement

:3200:32

The Company’s directors are responsible for thepreparation and fair presentation of the Groupannual financial statements and separate annualfinancial statements, comprising the balancesheets at 30 June 2007 and the income statements,the statements of changes in equity and cash flowstatements for the year then ended, and the notesto the financial statements, which include asummary of significant accounting policies andother explanatory notes, and the directors’report, in accordance with InternationalFinancial Reporting Standards and in the mannerrequired by the Companies Act of South Africa.

The directors’ responsibility also includesmaintaining adequate accounting records and aneffective system of risk management.

The directors’ responsibility includes: designing,implementing and maintaining internal controlrelevant to the preparation and fair presentation ofthese financial statements that are free frommaterial misstatement, whether due to fraud orerror; selecting and applying appropriateaccounting policies; and making accountingestimates that are reasonable in the circumstances.

The internal controls include a risk-based systemof internal accounting and administrativecontrols designed to provide reasonableassurance that assets are safeguarded and thattransactions are executed and recorded inaccordance with generally accepted businesspractices and the Company’s policies andprocedures. These controls are implemented bytrained, skilled personnel with an appropriatesegregation of duties, are monitored bymanagement and include a comprehensivebudgeting and reporting system operating withinstrict deadlines and an appropriate controlframework.

The annual financial statements are prepared inaccordance with International FinancialReporting Standards, the provisions of theCompanies Act, Banks Act and the JSE listingrequirements and incorporate disclosure in linewith the accounting philosophy of the Company.The financial statements are based on appropriateaccounting policies consistently applied andsupported by reasonable and prudent judgementsand estimates.

The directors have made an assessment of theGroup and Company’s ability to continue as agoing concern and there is no reason to believethe businesses will not be going concerns in theyear ahead.

The auditor is responsible for reporting onwhether the Group annual financial statementsand separate parent annual financial statementsare fairly presented in accordance with theapplicable financial reporting framework.

Approval of Group financial statements andseparate annual financial statements

The Group annual financial statements andseparate annual financial statements of theCompany were approved by the board ofdirectors on 6 September 2007 and signed on theirbehalf by:

MB Glatt RDEB SassoonNon-Executive Chief ExecutiveChairman Officer

6 September 2007

Company Secretary’s CertificateCompany Secretary’s Certificate

In terms of Section 268G(d) of the Companies Act, 1973, as amended, I hereby certify that the Companyhas lodged with the Registrar of Companies, for the financial year ended 30 June 2007, all such returns asare required of a public company in terms of the Companies Act and that all such returns are true, correctand up to date.

S JacksonGroup Secretary6 September 2007


:3300:33

REPORT OF THEINDEPENDENT AUDITORS

TO THE MEMBERS OF SASFIN HOLDINGS LIMITED

We have audited the Group annual financialstatements and the annual financial statements ofSasfin Holdings Limited which comprise thebalance sheets at 30 June 2007 and the incomestatements, the statements of changes in equityand cash flow statements for the year then ended,and the notes to the financial statements whichinclude a summary of significant accountingpolicies and other explanatory notes and thedirectors’ report as set out on pages 34 to 90.

Directors' responsibility for the financialstatements

The Group directors are responsible for thepreparation and fair presentation of thesefinancial statements in accordance withInternational Financial Reporting Standards andin the manner required by the Companies Act ofSouth Africa. This responsibility includes:designing, implementing and maintaining internalcontrols relevant to the preparation and fairpresentation of the Group financial statementsthat are free from material misstatement,whether due to fraud or error; selecting andapplying appropriate accounting policies andmaking accounting estimates that are reasonablein the circumstances.

Auditors' responsibility

Our responsibility is to express an opinion onthese financial statements based on our audit. Weconducted our audit in accordance withInternational Standards on Auditing. Thosestandards require that we comply with ethicalrequirements and plan and perform the audit toobtain reasonable assurance whether the financialstatements are free from material misstatement.

An audit involves performing procedures toobtain audit evidence about the amounts anddisclosures in the financial statements. Theprocedures selected depend on the auditor’sjudgment, including the assessment of the risks of

material misstatement of the financialstatements, whether due to fraud or error. Inmaking those risk assessments, the auditorconsiders internal control relevant to the entity’spreparation and fair presentation of the financialstatements in order to design audit proceduresthat are appropriate in the circumstances, butnot for the purpose of expressing an opinion onthe effectiveness of the entity’s internal control.An audit also includes evaluating theappropriateness of accounting policies used andthe reasonableness of accounting estimates madeby management, as well as evaluating the overallpresentation of the financial statements.

We believe that the audit evidence we haveobtained is sufficient and appropriate to providea basis for our audit opinion.

Opinion

In our opinion, these financial statements presentfairly, in all material respects, the consolidatedand separate financial position of Sasfin HoldingsLimited at 30 June 2007, and its consolidated andseparate financial performance and consolidatedand separate cash flows for the year then endedin accordance with International FinancialReporting Standards and in the manner requiredby the Companies Act of South Africa.

KPMG Inc. PKF (Jhb) Inc.Registered Auditor Registered Auditor

Per Heather Berrange Per Leanne LevyChartered Accountant (SA) Chartered Accountant (SA)Registered Auditor Registered AuditorDirector Director6 September 2007 6 September 2007

85 Empire Road 42 Wierda Road WestParktown Sandton2193 2196

ificate

Independent AuditorsReport of the Independent Auditors


Directors’ ReportDirectors’ Report

:3400:34

Nature of business

The Company is a bank-controlling companylisted under the "Financials: Speciality and OtherFinance sector" of the JSE, whose subsidiariesprovide a wide range of complementary banking,financial and related services to its target marketof entrepreneurial commercial, corporate andprivate clients.

Financial results

The results of the Company and the Group are setout in the annual financial statements andaccompanying notes.

Directors' interests

At the financial year-end the directors held,directly and indirectly, interests in the Company'sissued ordinary share capital as reflected below:

Directors and company secretary

The directors of the Company are:CN Axten, ETB Blight, MB Glatt, AW Greenstein, DD Mokgatle, MS Rylands, RDEBSassoon, M Segal and ML Smith. D Paizes resigned asa director on 5 December 2006. DD Mokgatle andMS Rylands were appointed on 21 May 2007.

S Jackson is the company secretary at the date ofthis report. His business and postal address areshown on page 95.

2007 2006

Direct Indirect non- Direct Indirect non-beneficial beneficial Total beneficial beneficial Total

Number Number Number Number Number Number

MB Glatt – 2 763 902 2 763 902 – 2 763 902 2 763 902 AW Greenstein 280 472 – 280 472 143 305 – 143 305 D Paizes – – – 25 000 – 25 000 RDEB Sassoon – 12 009 372 12 009 372 – 12 009 372* 12 009 372*

280 472 14 773 274 15 053 746 168 305 14 773 274 14 941 579

* Restated

At the financial year-end the directors held, directly and indirectly, interests in the Company's non-redeemable, non-cumulative,non-participating preference shares:

2007 2006

Direct Indirect non- Direct Indirect non-beneficial beneficial Total beneficial beneficial Total

Number Number Number Number Number Number

MB Glatt – 10 000 10 000 – 10 000 10 000 D Paizes – – – 2 000 – 2 000 RDEB Sassoon – – – – 3 000 3 000

– 10 000 10 000 2 000 13 000 15 000

Details of share options held by executive directors are given on page 85.

There have been no changes to the above holdings since the year-end to the date of this report.


Directors’ ReportDirectors’ Reportcontinued

:3500:35

DIRECTORS’ REPORT

Group Share Incentive Scheme

Information on options granted to employees andexecutive directors under the Group ShareIncentive Scheme is given on page 85.

Analysis of shareholders

The analysis of preference and ordinary share-holders is given on page 91.

Restructure of Group companies

At the request of the SARB, the Group wasrestructured so that all the Bank's non-bankingactivities are housed under a separate subsidiaryof Sasfin. With effect from 1 July 2006, the Bankdisposed of its investments in SasSec, SasfinPrivate Equity Fund Managers (Pty) Limited and

SFAS, including loan accounts to its operatingsubsidiary company, SFS. SFS is a 90% ownedsubsidiary of Sasfin. The share investments andloan accounts were sold at book value and had noimpact on the Group results.

Directors' emoluments

The emoluments of the directors of the Company for the year ended 30 June 2007 were as follows:

Services as Cash Other Incentive Total Totaldirectors package * benefits ** bonus *** 2007 2006

R R R R R R

Executive directorsRDEB Sassoon – 1 579 481 379 692 1 186 788 3 145 961 2 901 552 AW Greenstein – 1 521 054 212 946 730 000 2 464 000 2 408 208 M Segal – 1 508 081 328 035 730 000 2 566 116 1 695 694

Non-executive directorMB Glatt 330 000 – – – 330 000 322 500

Independent non-executive directorsCN Axten 181 500 – – – 181 500 177 375 ETB Blight 291 090 – – – 291 090 224 714 D Paizes 57 750 – – – 57 750 112 875 ML Smith 82 500 – – – 82 500 80 625 MS Rylands 197 541 – – – 197 541 –

DD Mokgatle 183 333 – – – 183 333 –

1 323 714 4 608 616 920 673 2 646 788 9 499 791 7 923 543

* The emoluments to the executive directors are paid by subsidiaries of the Company.** Other benefits comprise: provident fund, medical aid, group life and company car.*** The incentive bonuses paid relate to performances in the prior financial year.



:3600:36

Special resolutions passed

The following companies changed their names byspecial resolution during the period covered bythis report.

• Sasfin Frankel Pollak Securities (Pty) Limitedchanged its name to Sasfin Securities (Pty)Limited

• Sasfin Investment and Asset Managers (Pty)Limited changed its name to Sasfin FinancialAdvisory Services (Pty) Limited

• Faranani Asset Managers (Pty) Limited changedits name to Sasfin Asset Managers (Pty) Limited

The requisite special resolutions were passedon 15 June 2007 and registered in July 2007.

• Equipment Rentals Securitisation No. 1 (Pty)Limited changed its name to South AfricanSecuritisation Programme (Pty) Limited inSeptember 2007.

SENS announcement

A SENS announcement dated 7 May 2007 statedthat the Company has entered into negotiationswhich, if successfully concluded, may have aneffect on the price of the Company's securities.Shareholders are advised that this cautionary hasbeen withdrawn and appropriate informationrelating to this announcement is disclosed in thepost balance sheet event paragraph.

Dividends

Ordinary share dividends

On 23 October 2006, a final ordinary dividend of99 cents per share was paid to ordinaryshareholders registered on 20 October 2006.

On 23 April 2007, an interim ordinary dividend of73 cents per share was paid to ordinaryshareholders registered on 20 April 2007.

On 5 November 2007, a final ordinary dividend of134 cents per share will be paid to ordinaryshareholders registered on 2 November 2007.

Preference share dividends

On 16 October 2006, a preference dividend of392,77 cents per preference share was paid topreference shareholders registered on 13 October2006.

On 10 April 2007, a preference dividend of442,09 cents per preference share was paid topreference shareholders registered on 5 April2007.

On 29 October 2007, a preference dividend of467,26 cents per preference share will be paid topreference shareholders registered on 26 October2007.

Subsidiaries, special purpose entities, associated and joint venture companies

The interests in subsidiaries, special purpose entities, associated and joint venture companies that wereconsidered material to the Group's financial position and results are set out in note 38 on pages 80 to 83.

The interest of the Company in the aggregate net income and losses after taxation (before inter-groupdividends) of subsidiaries, special purpose entities, associated and joint venture companies is:

2007 2006R'000 R'000

Net income 145 391 157 292

Net losses 5 472 843



:3700:37

DIRECTORS’ REPORT

Share capital

Ordinary share capital

There were no changes in the authorised sharecapital. 348 083 shares were issued to the SasfinShare Incentive Trust during the financial yearended 30 June 2007.

Preference share capital

There were no changes to the authorised andissued preference share capital.

Post balance sheet event

Conditional specific issue of shares for cash toCircle Capital

Further to the cautionary announcementspublished on 7 May 2007, 19 June 2007 and 30 July2007, shareholders are advised that Sasfin has,subject to the fulfilment of certain suspensiveconditions, entered into an agreement in terms ofwhich it will allot and issue 9 630 000 new Sasfinordinary shares to Circle Capital, a black-ownedinvestment holding company, as a specific issueof shares for cash at a subscription price ofR495 million or R51,40 per share ("the specificissue of shares" or "the transaction").

The transaction will result in Circle Capitalowning 26% of the issued ordinary shares of theCompany. The specific issue of shares is subject tothe fulfilment of certain suspensive conditionswhich include regulatory approvals, the approvalof the requisite majority of Sasfin's shareholdersin a general meeting, and the completion of a duediligence investigation. Circle Capital is in theprocess of securing the necessary funding for thetransaction.

It has been agreed with the Bank's existing BEEshareholder, InnoVent, that following theimplementation of the specific issue of shares,their funding structure will be restructured. It isanticipated that this will result in InnoVentowning approximately 3% of the Company.


Balance SheetsBalance Sheets

:3800:38

at 30 June

ASSETS

Cash and cash balances 2 394 394 681 635 – –

Short-term negotiable securities 3 35 372 24 922 – –

Other receivables 4 298 776 394 783 767 18

Loans and advances 5 1 508 201 1 189 078 – –

Investment securities 6 178 212 61 157 41 115 2 356

Investments in associated and joint venture companies 7 60 139 49 413 70 526 66 748

Subsidiary companies 8 126 995 161 802

Property and equipment 9 60 544 49 376 – –

Intangible assets and goodwill 10 6 458 9 080 – –

Deferred tax asset 11 2 856 463 – –

Total assets 2 544 952 2 459 907 239 403 230 924

LIABILITIES

Deposits from banks 12 29 186 78 512 – –

Deposits from customers 13 745 781 626 851 – –

Other payables 14 235 219 320 900 615 382

Debt securities issued 15 674 974 670 830 – –

Provisions 16 11 457 10 670 – –

Taxation 32 017 39 499 705 185

Deferred tax liability 11 41 903 44 017 – –

Total liabilities 1 770 537 1 791 279 1 320 567

Equity

Ordinary share capital 17 270 266 270 266

Ordinary share premium 18 25 433 23 259 25 815 23 905

Reserves 472 529 377 186 12 720 6 908

Preference share capital 19 19 19 19 19

Preference share premium 20 199 259 199 259 199 259 199 259

Total equity attributable to equity holders of the parent 697 510 599 989 238 083 230 357

Minority interest 76 905 68 639 – –

Total equity 774 415 668 628 238 083 230 357

Total liabilities and equity 2 544 952 2 459 907 239 403 230 924

Commitments and contingencies 21 101 118 265 183 – –

Group Company

2007 2006 2007 2006Note R’000 R’000 R’000 R’000


SASFIN ANNUAL REPORT 2007

for the years ended 30 June

Income StatementsIncome Statements

:3900:39

Interest income 22 261 755 205 143 5 705 1

Interest expense 23 126 682 92 552 2 646 198

Net interest income/(loss) 135 073 112 591 3 059 (197)

Impairment losses on loans and advances 5 10 345 7 571 – –

Net income from lending activities 124 728 105 020 3 059 (197)

Other income 24 389 986 366 297 67 437 48 151

Operating income 514 714 471 317 70 496 47 954

Operating expenses 291 923 245 444 2 590 1 020

Profit from operations 25 222 791 225 873 67 906 46 934

Share of associated and joint venture companies' income 5 185 4 277 – –

Profit before taxation 227 976 230 150 67 906 46 934

Income tax expense 26 56 601 55 472 705 737

Profit for the year 171 375 174 678* 67 201 46 197

Profit attributable to:

Minority interest 15 552 10 244 – –

Preference shareholders 15 904 7 985 15 904 7 985

Equity holders of the parent 139 919 156 449 51 297 38 212

Profit for the year 171 375 174 678* 67 201 46 197

* Profit for the year in 2006 included the once-off

realised capital gain of R50,4 million on disposal of

investments net of capital gains tax.

Weighted average number of ordinary shares in issue ('000) 26 714 26 271

Earnings per ordinary share (cents) 27.4 523,8 595,5

Diluted earnings per ordinary share (cents) 27.6 514,4 577,2

Dividends per ordinary share relating to profit

for the year (cents) 207,0 161,0

Of which interim 73,0 62,0

Of which final 134,0 99,0

Dividends per preference share relating to profit

for the year (cents) 909,4 789,8

Of which dividend number 3 397,0




Group Company

2007 2006 2007 2006Note R’000 R’000 R’000 R’000


Cash Flow StatementsCash Flow Statements

:4000:40


Cash flows from operating activities

Cash receipts from customers 28 615 360 519 079 74 013 46 579

Cash paid to customers, employees and suppliers 28 (406 815) (330 064) (5 236) (1 218)

Cash inflows from operating activities 28 208 545 189 015 68 777 45 361

Taxation paid 29 (68 590) (28 733) (185) (552)

Dividends paid 30 (61 906) (47 671) (62 022) (47 749)

Cash flows from operating activities before changes

in operating assets and liabilities 78 049 112 611 6 570 (2 940)

Changes in operating assets and liabilities (202 954) 109 851 (516) (18)

Increase in loans and advances (329 468) (106 941) – –

Decrease/(increase) in other receivables 98 526 (131 040) (749) (18)

Increase in deposits 118 930 224 831 – –

(Decrease)/increase in other payables and provisions (90 942) 123 001 233 –

Net cash flows from operating activities (124 905) 222 462 6 054 (2 958)

Cash outflows from investing activities (104 479) (21 894) (7 970) (100 122)

Proceeds from the disposal of property and equipment 346 2 621 – –

Proceeds from the sale of investment securities 2 455 56 638 – 2 108

Acquisition of property and equipment (17 322) (16 036) – –

Increase in goodwill and intangible assets (2 935) (9 080) – –

(Increase)/decrease in investment securities (75 658) (8 000) (39 630) 31 416

Increase in investments in associated and joint ventures (10 726) (48 037) (3 779) (66 748)

(Decrease)/increase in subsidiary companies 31 (639) – 35 440 (66 898)

Net cash flows from financing activities (1 944) 147 348 1 914 103 080

Issue of shares 2 178 103 343 1 914 103 080

Increase in debt securities 4 144 2 607 – –

(Decrease)/increase in minority interest (8 266) 41 398 – –

Net (decrease)/increase in cash and cash equivalents (231 328) 347 916 – –

Cash and cash equivalents at beginning of the year 628 045 280 129 – –

Cash and cash equivalents acquired 31 3 863 – – –

Cash and cash equivalents at end of the year 32 400 580 628 045 – –

Group Company

2007 2006 2007 2006Note R’000 R’000 R’000 R’000




Statements of ChangesStatements of Changes in Equity

:4100:41

GROUPBalance at 30 June 2005 19 814 – 253 097 742 1 749 4 400 279 802 99 646 16 997 396 445 Available-for-sale portfolio fair value adjustment – – – – 68 – 68 – 30 98 Profit for the year – – 164 434 – – – 164 434 – 10 244 174 678 Issue of shares 6 3 705 – – – – 3 711 99 632 – 103 343 Change in shareholding of subsidiaries – – – – – – – – 41 968 41 968 Equity-settled share-based payments – – – 367 – – 367 – – 367 Transfer to regulatory general credit-risk reserve – – (600) – 600 – – – – Preference share dividends – – (7 985) – – – (7 985) – – (7 985)Ordinary share dividends – – (39 686) – – – (39 686) – (600) (40 286)

Balance at 30 June 2006 19 820 3 705 369 260 1 109 1 817 5 000 400 711 199 278 68 639 668 628 Available-for-sale portfoliofair value adjustment – – – – 793 – 793 – 466 1 259 Profit for the year – – 155 823 – – – 155 823 – 15 552 171 375 Issue of shares 4 2 174 – – – 2 178 – – 2 178 Change in shareholding of subsidiaries – – – – – – – – 2 366 2 366 Equity-settled share-based payments – – – 633 – – 633 – – 633 Transfer to regulatory general credit-risk reserve – – (2 083) – – 2 083 – – – – Preference share dividends – – (15 904) – – – (15 904) – – (15 904)Ordinary share dividends – – (46 002) – – – (46 002) – (10 118) (56 120)

Balance at 30 June 2007 19 824 5 879 461 094 1 742 2 610 7 083 498 232 199 278 76 905 774 415

COMPANYBalance at 30 June 2005 20 723 – 7 351 742 – – 28 816 99 646 – 128 462 Profit for the year – – 46 197 – – – 46 197 – – 46 197 Issue of shares 6 3 442 – – – – 3 448 99 632 – 103 080 Equity-settled share-based payments – – – 367 – – 367 – – 367 Preference share dividends – – (7 985) – – – (7 985) – – (7 985)Ordinary share dividends – – (39 764) – – – (39 764) – – (39 764)

Balance at 30 June 2006 20 729 3 442 5 799 1 109 – – 31 079 199 278 – 230 357 Profit for the year – – 67 201 – – – 67 201 – – 67 201 Issue of shares 4 1 910 – – – – 1 914 – – 1 914 Equity-settled share-based payments – – – 633 – – 633 – – 633 Preference share dividends – – (15 904) – – – (15 904) – – (15 904)Ordinary share dividends – – (46 118) – – – (46 118) – – (46 118)

Balance at 30 June 2007 20 733 5 352 10 978 1 742 – – 38 805 199 278 – 238 083

Prefe-Ordinary Regu– Total rence

share Dis- Share- Avail- latory ordinary share Totalcapital tribu- based able- general sharecapital share-

and Treasury table payment for-sale credit-risk holders and Minority holders’premium shares reserves reserves reserves reserves equity premium interest equity

R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000


Financial StatementsNotes to the Financial Statements

:4200:42


1. ACCOUNTING POLICIESThe annual financial statements of SasfinHoldings Limited (the "Company") for the yearended 30 June 2007 comprise the Company andits subsidiaries, together referred to as the"Group", and the Group's interest in associatesand jointly controlled entities.

The principal accounting policies adopted inthe preparation of these annual financialstatements are set out below.

1.1 STATEMENT OF COMPLIANCEThe consolidated financial statements areprepared in accordance with, and complywith International Financial ReportingStandards (“IFRS”) and the requirementsof the South African Companies Act of1973. The consolidated financialstatements are prepared in accordancewith the going concern principle underthe historical cost basis as modified bythe revaluation of certain financial assetsand liabilities.

1.2 BASIS OF PREPARATIONThe accounting policies are consistentwith those applied in the previous year.

The financial statements are presentedin South African Rand, which is SasfinHoldings Limited's functional currency,rounded to the nearest thousand. Theyare prepared on the historical cost basisexcept that the following are stated atfair value: derivative financialinstruments, financial instruments heldfor trading and financial instrumentsclassified as available-for-sale.

The preparation of financial statementsin conformity with IFRS requiresmanagement to make judgements,estimates and assumptions that affectthe application of policies and reportedamounts of assets and liabilities, incomeand expenses. The estimates andassociated assumptions are based onhistorical experience and various otherfactors that are believed to bereasonable under the circumstances,the results of which form the basis ofmaking the judgements about carryingvalues of assets and liabilities that arenot readily apparent from othersources. Actual results may differ fromthese estimates.

The estimates and underlyingassumptions are reviewed on an ongoingbasis. Revisions to accounting estimatesare recognised in the period in which theestimate is revised if the revision affectsonly that period, or in the period of therevision and future periods if the revisionaffects both current and future periods.

Judgements made by management in theapplication of IFRS that have significanteffect on the financial statements andestimates with a significant risk ofmaterial adjustment in the next year arediscussed in note 39.

1.3 BASIS OF CONSOLIDATIONSubsidiariesSubsidiaries are those entities overwhose financial and operating policiesthe Group has the power to exercisecontrol, so as to obtain benefits fromtheir activities. In assessing control,potential voting rights that presentlyare exercisable or convertible are takeninto account.

The Group financial statementsincorporate the assets, liabilities andresults of the Company and itssubsidiaries. The results of thesubsidiaries are included from theeffective date of acquisition and untilcontrol ceases.

Special purpose entitiesWhere the Group, in substance, hasrights to obtain the majority of thebenefits of an entity and the specialpurpose entity was created toaccomplish a narrow well definedobjective, such entity is consolidated inthe same manner as subsidiarycompanies.

Accordingly, the Group's securitisationvehicle, SASP, the warehouse vehicle,Sasfin Warehouse No.1 (Pty) Limited andthe Sasfin Share Incentive Trust have beenconsolidated.

AssociatesAn associate is an entity over which theGroup has the ability of exercisingsignificant influence but which it does notcontrol. Investments in associatedcompanies are equity accounted in the



Financial Statements

:4300:43


1.3 BASIS OF CONSOLIDATION (continued)Associates (continued)Group financial statements, from the datethat significant influence commencesuntil significant influence ceases. Equityaccounted income represents the Group'sproportionate share of profits of theseentities. The Group's investment in anassociate is written down when it isconsidered to be impaired. When theGroup's share of losses exceeds thecarrying amount of the associate, thecarrying amount is reduced to nil(inclusive of debt outstanding) andrecognition of further losses is discon-tinued except to the extent that theGroup has guaranteed obligations inrespect of the associate. Goodwill isincluded in the investment balance.

Joint venturesA joint venture is an entity controlledjointly by the Group and one or moreother ventures in terms of a contractualarrangement. Investments in jointventures are proportionately consolidatedin the Group financial statements, fromthe date that joint control commencesuntil the date that joint control ceases.

Transactions eliminated onconsolidationIntragroup balances and any unrealisedgains and losses or income and expensesarising from intergroup transactions, areeliminated in preparing the consolidatedfinancial statements. Unrealised gainsarising from transactions with associatesand jointly controlled entities areeliminated to the extent of the Group'sinterest in the entity. Unrealised losses areeliminated in the same way as unrealisedgains, but only to the extent there is noevidence of impairment.

1.4 INTANGIBLE ASSETSGoodwillGoodwill represents the cost ofacquisition over the fair value of theGroup's share of net identifiable assets,liabilities and contingent liabilities of theacquiree on the acquisition date.Goodwill arises on the acquisition ofsubsidiaries, associates or joint ventures'net assets classified as a business.Goodwill is stated at cost lessaccumulated impairment losses and is notamortised. Goodwill is allocated to cash

generating units and is tested at leastannually or more frequently if required,for impairment or changes in estimatedfuture benefits.

"Negative goodwill" arising on anacquisition is recognised directly in theincome statement.

Software developmentDirect software development costs that areclearly associated with an identifiable andunique system, which will be controlled bythe Group and have a probable economicbenefit exceeding one year, are recognisedas intangible assets. Direct costs includesoftware development, employee costs andan appropriate portion of overheads.

Direct software development costsrecognised as intangible assets areamortised on the straight-line basis overthe expected useful lives of the assets,being between two and five years.Capitalised computer software is carriedat cost less accumulated amortisation andless accumulated impairment losses.Computer software is tested annually forimpairment or changes in estimated futurebenefits.

1.5 FINANCIAL INSTRUMENTSFinancial instruments, as reflected on thebalance sheet, include all financial assetsand financial liabilities, including deriva-tive instruments, but exclude investmentsin subsidiaries, associated companies andjoint ventures, employee benefit plans,property, plant and equipment, deferredtaxation, taxation payable, intangibleassets and goodwill. Financial instrumentsare accounted for in terms of theprinciples of IAS 32 Financial Instruments:Disclosure and Presentation and IAS 39Financial Instruments: Recognition andMeasurement.

Initial recognitionFinancial instruments are recognised onthe balance sheet when the Groupbecomes a party to the contractualprovisions of a financial instrument. Allpurchases of financial assets that requiredelivery within the time frame establishedby regulation or market convention(‘regular way’ purchases) are recognisedat trade date, which is the date on which

Notes to the Financial Statementscontinued


Financial StatementsNotes to the Financial Statementscontinued

:4400:44

1.5 FINANCIAL INSTRUMENTS (continued)Initial recognition (continued)the Group commits to purchase the asset.Financial liabilities are recognised ontrade date, which is when the Groupbecomes a party to the contractualprovisions of the financial instrument.

Initial measurementFinancial instruments are initiallyrecognised at fair value plus, in the caseof a financial asset or financial liabilitynot at fair value through profit or loss,transaction costs that are incremental tothe Group and directly attributable tothe acquisition or issue of the financialasset or financial liability.

Subsequent measurementSubsequent to initial measurement,financial instruments are measured ateither fair value or amortised cost,depending on their classification:

Financial assets and financialliabilities at fair value through theincome statementFinancial instruments at fair valuethrough the income statement consistof trading instruments and instrumentsthat the Group has elected, on initialrecognition date, to designate at fairvalue through the income statement.

Financial assets and financial liabilitiesat fair value through the incomestatement are measured at fair value,with fair-value gains and losses(excluding impairment losses, interestincome and interest expense calculatedon the amortised-cost basis relating tothose interest-bearing instruments thathave been designated as at fair valuethrough the income statement) reportedin non-interest revenue as they arise.

Non-trading financial liabilitiesAll financial liabilities, other than thoseat fair value through the incomestatement, are classified as non-tradingfinancial liabilities and are measured atamortised cost using the effectiveinterest method.

Held-to-maturity financial assetsHeld-to-maturity financial assets arenon-derivative financial assets with fixedor determinable payments and fixedmaturity that the Group has the intentand ability to hold to maturity, otherthan those that meet the definition ofloans and receivables or those that weredesignated as at fair value through theincome statement or available-for-sale.Held-to-maturity financial assets aremeasured at amortised cost using theeffective interest method, with interestincome and impairment losses recognisedin the income statement.

Loans and receivablesLoans and receivables are non-derivativefinancial assets with fixed ordeterminable payments that are notquoted in an active market, other thanthose classified by the Group as at fairvalue through the income statement oravailable-for-sale. Financial assetsclassified as loans and receivables arecarried at amortised cost using theeffective interest method, with interestincome and impairment losses recognisedin the income statement.The majority ofthe Group's advances are included in theloans and receivables category.

Available-for-sale financial assetsFinancial assets are classified asavailable-for-sale where the intentionwith regard to the instrument and itsorigination and designation does notfall within the ambit of the otherfinancial asset classifications. Available-for-sale instruments are typically assetsthat are held for a longer period andin respect of which short-termfluctuations in value do not affect theGroup's hold or sell decision.

Available-for-sale financial assets aremeasured at fair value, with fair-valuegains and losses recognised directly inequity along with the associateddeferred taxation. When available-for-sale equity instruments are determinedto be impaired to the extent that thefair value decline is prolonged andsignificant, the resultant losses arerecognised in the income statement.



Financial Statements

:4500:45


1.5 FINANCIAL INSTRUMENTS (continued)Embedded derivativesCertain derivatives embedded in otherfinancial and non-financial instruments,such as the conversion option in aconvertible bond, are treated asseparate derivatives and recognised ona standalone basis, when their risks andcharacteristics are not closely related tothose of the host contract and the hostcontract is not carried at fair value,with unrealised gains and lossesreported in the income statement.

If it is not possible to determine the fairvalue of the embedded derivative, theentire hybrid instrument is categorisedas at fair value through the incomestatement and measured at fair value,with changes in fair value beingrecognised in profit and loss.

Measurement basis of financialinstrumentsAmortised costAmortised-cost financial assets andfinancial liabilities are measured at fairvalue on initial recognition, plus orminus the cumulative amortisationusing the effective interest rate methodand any difference between that initialamount and the maturity amount, lessany cumulative impairment losses.

Fair valueDirect and incremental transaction costsare included in the initial fair value offinancial assets and financial liabilities,other than those at fair value throughthe income statement. The best evidenceof the fair value of a financial asset orfinancial liability at initial recognition isthe transaction price, unless the fairvalue of the instrument is evidenced bycomparison with other currentobservable market transactions in thesame instrument or based on a valuationtechnique whose variables include onlymarket observable data.

If quoted bid prices are unavailable, thefair value of financial assets andfinancial liabilities is estimated usingpricing models or discounted cash flowtechniques. Where discounted cash flowtechniques are used, estimated future

cash flows are based on management'sbest estimates and the discount rateused is a market-related rate at thebalance sheet date for an instrumentwith similar terms and conditions.Where pricing models are used, inputsare based on market-related measures atthe balance sheet date.

The fair value of a financial liability witha demand feature is not less than theamount payable on demand, discountedfrom the first date on which the amountcould be required to be paid. In caseswhere the fair value of financialliabilities cannot be reliably determined,these liabilities are recorded at theamount due.

Investments in equity instruments thatdo not have a quoted market price in anactive market and whose fair valuecannot be reliably measured, andderivatives that are linked to and have tobe settled by delivery of such unquotedequity instruments, are not measured atfair value but at cost. Fair value isconsidered reliably measurable if:

the variability in the range ofreasonable fair value estimates is notsignificant for that instrument; or

the probabilities of the variousestimates within the range can bereasonably assessed and used inestimating fair value.

DerecognitionAll financial assets and financialliabilities are derecognised on tradedate, which is when the Group commitsto selling a financial asset or redeeminga financial liability.

The Group derecognises a financial assetwhen and only when:

– the contractual rights to the cashflows arising from the financial assethave expired or have been forfeitedby the Group; or

– it transfers the financial asset,including substantially all the risksand rewards of ownership of theasset; or


Notes to the Financial Statementscontinued



:4600:46

1.5 FINANCIAL INSTRUMENTS (continued)Derecognition (continued)– it transfers the financial asset, neither

retaining nor transferringsubstantially all the risks and rewardsof ownership of the asset, but nolonger retains control of the asset.

A financial liability is derecognisedwhen and only when the liability isextinguished, ie when the obligationspecified in the contract is discharged,cancelled or has expired.

The difference between the carryingamount of a financial asset or financialliability (or part thereof) that isderecognised and the considerationpaid or received, including any non-cash assets transferred or liabilitiesassumed, is recognised in the incomestatement for the period.

Impairment of financial assetsThe Group assesses at each balance sheetdate whether there is objective evidencethat a financial asset or group offinancial assets is impaired. A financialasset or a group of financial assets isimpaired and impairment losses areincurred if, and only if, there is objectiveevidence of impairment as a result ofone or more events that occurred afterthe initial recognition of the asset (a lossevent) and that loss event (or events) hasan impact on the estimated future cashflows of the financial asset or group offinancial assets that can be reliablyestimated. Objective evidence that afinancial asset or group of assets isimpaired includes observable data thathas come to the attention of the groupabout the following loss events:

– significant financial difficulty of theissuer or obligor;

– a breach of contract, such as a defaultor delinquency in interest or principalpayments;

– the Group, for economic or legalreasons relating to the borrower'sfinancial difficulty, granting to theborrower a concession that the Groupwould not otherwise consider;

– it becoming probable that theborrower will enter bankruptcy orother financial reorganisation;

– the disappearance of an active marketfor that financial asset because offinancial difficulties; or

– observable data indicating that thereis a measurable decrease in theestimated future cash flows from agroup of financial assets since theinitial recognition of those assets,although the decrease cannot yet beidentified with the individualfinancial assets in the group,including:

* adverse changes in the paymentstatus of borrowers in the group; or

* national or local economicconditions that correlate withdefaults on the assets in the group.

Assets carried at amortised costIf there is objective evidence that animpairment loss on loans and receivablesor held-to-maturity investments carriedat amortised cost has been incurred, theamount of the loss is measured as thedifference between the asset's carryingamount and the present value ofestimated future cash flows (excludingfuture credit losses that have not beenincurred) discounted at the financialasset's original effective interest rate.The carrying amount of the asset isreduced through the use of an allowanceaccount and the amount of the loss isrecognised in the income statement.

The Group first assesses whether there isobjective evidence of impairmentindividually for financial assets that areindividually significant, and individuallyor collectively for financial assets thatare not individually significant. If theGroup determines that there is noobjective evidence of impairment for anindividually assessed financial asset,whether significant or not, it includesthe asset in a group of financial assetswith similar credit risk characteristicsand collectively assesses them forimpairment.

If, in a subsequent period, the amountof the impairment loss decreases andthe decrease can be related objectivelyto an event occurring after theimpairment was recognised (such as an



:4700:47



1.5 FINANCIAL INSTRUMENTS (continued)Impairment of financial assets(continued)improvement in the debtor's creditrating), the previously recognisedimpairment loss is reversed by adjustingthe allowance account. The reversal doesnot result in a carrying amount of thefinancial asset that exceeds what theamortised cost would have been had theimpairment not been recognised at thedate on which the impairment is reversed.The amount of the reversal is recognisedin the income statement for the period.

Financial assets carried at costIf there is objective evidence that animpairment loss has been incurred on anunquoted equity instrument that is notcarried at fair value, because its fairvalue cannot be reliably measured, oron a derivative asset that is linked toand has to be settled by delivery of suchan unquoted equity instrument, theamount of the impairment loss ismeasured as the difference between thecarrying amount of the financial assetand the present value of estimatedfuture cash flows discounted at thecurrent market rate of return for asimilar financial asset. Such impairmentlosses are not reversed.

Available-for-sale financial assetsWhen a decline in the fair value of anavailable-for-sale financial asset hasbeen recognised directly in equity andthere is objective evidence that theasset is impaired, the cumulative netloss that has been recognised directly inequity is removed from equity andrecognised in the income statementeven though the financial asset has notbeen derecognised. The amount of thecumulative loss that is removed fromequity and recognised in the incomestatement is the difference between theacquisition cost (net of any principalrepayment and amortisation) andcurrent fair value, less any impairmentloss on that financial asset previouslyrecognised in the income statement.Impairment losses recognised in theincome statement for an investment inan equity instrument classified asavailable-for-sale are not reversedthrough the income statement.

If, in a subsequent period, the fair valueof a debt instrument classified asavailable-for-sale increases and theincrease can be objectively related to anevent occurring after the impairmentloss was recognised in the incomestatement, the impairment loss isreversed, with the amount of thereversal recognised in the incomestatement for the period.

Offsetting financial instruments andrelated incomeFinancial assets and liabilities are offsetand the net amount reported in thebalance sheet only when there is alegally enforceable right to set off andthere is an intention of settling on a netbasis or realising the asset and settlingthe liability simultaneously. Income andexpense items are offset only to theextent that their related instrumentshave been offset in the balance sheet,with the exception of those relating tohedges, which are disclosed inaccordance with the profit or loss effectof the hedged item.

1.6 HEDGINGDerivative financial instrumentsThe Group uses derivative financialinstruments to hedge exposures toforeign exchange risk arising fromoperational, financing and investingactivities. In accordance with its treasurypolicy, the Group does not hold or issuederivative financial instruments fortrading purposes.

Derivative financial instruments heldfor risk management are measured atfair value in the balance sheet.

Fair value hedgesWhere a derivative financial instrumenthedges the changes in fair value of arecognised asset or liability or anunrecognised firm commitment (or anidentified portion of such asset, liabilityor firm commitment), any gain or loss onthe hedging instrument is recognised inthe income statement. The hedged item isalso stated at fair value in respect of therisk being hedged, with any gain or lossbeing recognised in the income statement.




:4800:48

1.7 PROPERTY AND EQUIPMENTOwned assetsProperty and equipment is stated at costless accumulated depreciation andimpairment losses. The cost of propertyand equipment includes expendituredirectly attributable to the acquisition ofproperty and equipment. Subsequentcosts are included in the carryingamount of the asset, or recognised as aseparate asset, when it is probable thatfuture economic benefits are expected toflow to the Group.

Repairs and maintenance of property andequipment are recognised directly in theincome statement. Gains or losses ondisposal of property, plant and equipmentare included in the income statement.

Leased assetsLeases in terms of which the Groupassumes substantially all the risks andrewards of ownership are classified asfinance leases. Assets which are leasedin terms of financial lease agreementsare capitalised at the lower of fair valueand the present value of minimum leasepayments at inception of the lease. Thecapital element of future obligationsunder the leases is included as a liabilityin the balance sheet. Lease payments areallocated between finance charges andcapital repayment using the effectiverate method.

DepreciationDepreciation is calculated on thestraight-line basis, at rates which areestimated to amortise the assets to theiranticipated residual values over theiruseful lives. The assets' residual valuesand useful lives are reviewed andadjusted annually if appropriate.

Buildings 50 yearsComputer equipment 3 yearsComputer software 2 yearsFurniture, fittings and office equipment 6-10 yearsMotor vehicles 5 yearsEquipment 5 years

Land is not depreciated.

1.8 FOREIGN CURRENCIESForeign currency transactionsTransactions in foreign currencies aretranslated at the foreign exchange rateruling at the date of the transaction.Gains and losses arising on translationto South African Rand are recognised inthe income statement. Monetary assetsand liabilities denominated in foreigncurrencies at the balance sheet date aretranslated to South African Rand at theforeign exchange rate ruling at thatdate. Non-monetary assets andliabilities that are measured in terms ofhistorical cost in a foreign currency aretranslated using exchange rates at thedate of the transaction. Non-monetaryassets and liabilities denominated inforeign currencies that are stated at fairvalue are translated to South AfricanRand at foreign exchange rates ruling atthe dates the fair value was determined.

Foreign operationsThe assets and liabilities of foreignoperations, including goodwill and fairvalue adjustments arising onconsolidation, are translated to SouthAfrican Rand at foreign exchange ratesruling at the balance sheet date.Revenue and expenses are translatedinto South African Rand at the averagerate of exchange during the year.Foreign exchange differences arising onretranslation are recognised directly ina separate component of equity.

1.9 PROVISIONSProvisions are recognised in the balancesheet when the Group has a present legalor constructive obligation as a result ofpast events, it is probable that an outflowof economic benefits will be required tosettle the obligation, and a reliableestimate of the amount of the obligationcan be made. If the effect is material,provisions are determined by discountingthe expected future cash flows at a pre-tax rate that reflects current marketassessments of the time value of moneyand, where appropriate, the risks specificto the liability.

Employee entitlements to annual leaveare recognised when they accrue toemployees.



:4900:49



1.10 INSTALMENT FINANCEGroup as the lessorRental, lease and instalment salecontracts are regarded as financingtransactions, with rentals andinstalments receivable, less unearnedfinance charges, being included inadvances on the balance sheet. Thedifference between the gross receivableand the present value of the receivable isrecognised as unearned finance charges.

Finance income is recognised over theterm of the lease using the netinvestment method, which reflects theperiod rate of return.

Operating lease income is recognised inthe income statement on a straight-linebasis over the term of the lease.

Group as the lesseePayments made under operating leasesare recognised in the income statementon a straight-line basis over the term ofthe lease. Penalties for early terminationof operating lease contracts arerecognised as an expense in the period inwhich termination took place.

Payments made under finance leases areapportioned between the finance chargeand the reduction of the outstandingliability. The finance charge is allocated toeach period during the lease term so as toproduce a consistent periodic rate ofinterest on the liability outstanding.

1.11 REVENUEInterest income and interest expenseInterest is recognised on a timeproportion basis, taking into account thecarrying amount and the effectiveinterest rate. The effective interest rate isthe rate that exactly discounts estimatedfuture cash payments or receipts throughthe expected life of the financialinstrument to the carrying amount onthe financial statements. Whencalculating the effective interest rate, theCompany estimates cash flowsconsidering all contractual terms of thefinancial instrument but does notconsider future credit losses. Thecalculation includes all fees paid orreceived between parties to the contractthat are an integral part of the effective

interest rate, transaction costs and allother premiums or discounts.

Where financial assets have beenimpaired, the accrual of interest incomebased on the original terms of the loanis discounted, any increase of thepresent value of impaired loans to thepassage of time is recorded as interestincome. The effective interest rate isestablished on initial recognition of thefinancial instrument and is notsubsequently revised.

Fees and commissionFee and commission income isrecognised in the income statement onan accrual basis in accordance with theterms of the relevant agreements.

OtherRevenue, other than interest, fees andcommission, which includes fair valuegains or losses, foreign exchange gains,dividends from investments and netgains on the sale of assets, is recognisedin profit or loss when the amount ofrevenue from the transaction or servicecan be measured reliably.

1.12 COMMITMENTS AND CONTINGENCIESItems are classified as commitmentswhere the Group commits itself tofuture transactions or if the items willresult in the acquisition of assets.

Transactions are classified ascontingencies where the Group'sobligations depend on uncertain futureevents and principally consist of third-party obligations underwritten bybanking subsidiaries.

1.13 FUNDS UNDER ADMINISTRATIONWhere Group companies hold and investfunds on behalf of clients and act astrustees in any fiduciary capacity, theassets and liabilities representing theseactivities are not reflected on thebalance sheet. Income relating to theseactivities is recognised in the incomestatement in the period in which theservices are rendered.




:5000:50

1.14 CASH AND CASH EQUIVALENTSFor the purpose of the cash flowstatement, cash and cash equivalentscomprise cash on hand, short-termnegotiable securities and short-terminterbank funds net of interbankfunding, all of which are available for useby the Group unless otherwise stated.

1.15 IMPAIRMENTThe carrying amounts of the Group’sassets, other than deferred tax assets(see accounting policy 17) and financialinstruments (see accounting policy 5),are reviewed at each balance sheet dateto determine whether there is anyindication of impairment. If any suchindication exists, the asset’s recoverableamount is estimated.

An impairment loss is recognisedwhenever the carrying amount of an assetor its cash-generating unit exceeds itsrecoverable amount. Impairment lossesare recognised in the income statement.

Impairment losses recognised in respectof cash-generating units are allocatedfirst to reduce the carrying amount ofany goodwill allocated to cash-generating units (group of units) andthen, to reduce the carrying amount ofthe other assets in the unit (group ofunits) on a pro rata basis.

Calculation of recoverable amountThe recoverable amount of other assetsis the greater of their net selling priceand value in use. In assessing value inuse, the estimated future cash flows arediscounted to their present value usinga pre-tax discount rate that reflectscurrent market assessments of the timevalue of money and the risks specific tothe asset. For an asset that does notgenerate largely independent cashinflows, the recoverable amount isdetermined for the cash-generating unitto which the asset belongs.

Reversals of impairmentIn respect of other assets, animpairment loss is reversed if there hasbeen a change in the estimates used todetermine the recoverable amount.

1.16 EMPLOYEE BENEFITSDefined contribution planPayments to defined contribution plansare charged as an expense in the incomestatement as they fall due and allemployees are required to be members ofthe defined contribution provident fund.

Share-based payment transactionsThe share option scheme allows Groupemployees to acquire shares of theCompany. The fair value of optionsgranted is recognised as an employeeexpense in the income statement, with acorresponding increase in equity. The fairvalue is measured at grant date andspread on a straight-line basis over thevesting period, based on the Group'sestimate of share options that willeventually vest.

The Group has applied the requirements ofIFRS 2 to share-based payments. Inaccordance with the transitionalprovisions, IFRS 2 has been applied to allgrants of share options after 7 November2002 that were not vested as of 1 July 2004,the effective date of transition to IFRS.

Fair value is measured by use of theBlack-Scholes model, taking into accountthe terms and conditions upon which theoptions were granted. The amount recog-nised as an expense is adjusted to reflect theactual number of share options that vest.

1.17 INCOME TAXIncome taxation on the profit or loss forthe year comprises current and deferredtaxation. Income taxation is recognisedin profit or loss except to the extentthat it relates to items recogniseddirectly to equity, in which case it isrecognised in equity.

Current taxCurrent tax comprises income tax payable,calculated on the basis of expectedtaxable income for the year using the taxrates enacted or substantially enacted atthe balance sheet date, and anyadjustment of tax payable for prior years.

Secondary taxation on companies(“STC”) that arises from the distributionof dividends is recognised at the sametime as the liability to pay the relateddividend.



:5100:51



1.17 INCOME TAX (continued)Deferred taxDeferred tax is provided using the balancesheet liability method, based on temporarydifferences. Temporary differences aredifferences between the carrying amountsof assets and liabilities for financialreporting purposes and their tax base. Theamount of deferred tax provided is basedon the expected realisation of the carryingamount of assets and liabilities using taxrates enacted or substantially enacted atthe balance sheet date. Deferred tax ischarged to the income statement, exceptto the extent that it relates to a transactionthat is recognised directly in equity.

Deferred tax assets are recognised to theextent that it is probable that futureprofits will be available against whichthe associated unused tax losses anddeductible temporary differences can beutilised. Deferred tax assets are reducedto the extent it is no longer probable thatthe related tax benefit will be realised.

1.18 SEGMENT REPORTINGA segment is a distinguishable componentof the Group that is engaged in providingeither products or services, which issubject to risks and rewards that aredifferent from those of other segments.

Segment results include revenue,impairments, expenses and taxes directlyattributable to a segment and therelevant portion of enterprise revenueand expenses that can be allocated on areasonable basis to a segment, whetherfrom internal transactions or fromtransactions with other Group segments.Segment assets and liabilities comprisethose operating assets and liabilities thatare directly attributable to a segment orcan be allocated to the segment on areasonable basis.

1.19 GENERAL CREDIT-RISK RESERVEA general credit-risk reserve has beenrecognised as a separate component ofequity. This reserve comprises thedifference between the impairments ascalculated in terms of IAS 39, and theGroup's impairment policy, as prescribedby the South African Reserve Bank.

1.20 FINANCIAL GUARANTEE CONTRACTSA financial guarantee contract is acontract that requires the issuer to make

specified payments to reimburse theholder for a loss it incurs because aspecified debtor fails to make paymentwhen due in accordance with the originalor modified terms of a debt instrument.

These financial guarantee contracts areclassified as insurance contracts asdefined in IFRS 4 Insurance Contracts.A liability is recognised when it isprobable that an outflow of resourcesembodying economic benefits will berequired to settle the contract and areliable estimate can be made of theamount of the obligation. The amountrecognised is the best estimate of theexpenditure required to settle thecontract at the balance sheet date. Wherethe effect of discounting is material, theliability is discounted. The discount rateused is a pre-tax rate that reflects currentmarket assessments of the time value ofmoney and, where appropriate, the risksspecific to the liability.

The Company performs liabilityadequacy tests on financial guaranteecontract liabilities to ensure that thecarrying amount of the liabilities issufficient in view of estimated futurecash flows. When performing theliability adequacy test, the Companydiscounts all expected contractual cashflows and compares this amount to thecarrying value of the liability. Where ashortfall is identified, an additionalprovision is made.

1.21 SHARE CAPITALShare capital issued by the Company isrecorded as the proceeds received, net ofdirect issue costs. Ordinary and preferenceshare capital is classified as equity if it isnon-redeemable and any dividends arediscretionary, or it is redeemable only atthe Company's option.

Dividends are recognised as distributionswithin equity in the period in which theyare payable to shareholders.

When share capital recognised as equityis repurchased, the amount of theconsideration paid, including directlyattributable costs, is recognised as achange in equity. Repurchased sharesare classified as treasury shares andpresented as a deduction from totalequity.



Group Company

2007 2006 2007 2006R’000 R’000 R’000 R’000


:5200:52


2. CASH AND CASH BALANCES

Money on call 295 240 312 378 – –

Fixed deposits maturing within three months 83 000 359 265 – –

Balance with the South African Reserve Bank 16 154 9 992 – –

394 394 681 635 – –

The maturity analysis is based on the remaining

period to contractual maturity from year-end

Interbank deposits of South African Securitisation

Programme (Pty) Limited ceded as security

for the investment securities as per note 15 131 333 108 764 – –

Interbank deposits of Sasfin Asia Limited pledged as

security for trade finance related facilities 10 557 42 000 – –

3. SHORT-TERM NEGOTIABLE SECURITIES

Held-to-maturity assets

Land Bank bills maturing within three months 35 372 11 931 – –

Treasury bills maturing within three months – 12 991 – –

35 372 24 922 – –



4. OTHER RECEIVABLES

Derivatives at fair value 3 653 10 870 – –

Freight forwarding and customs clearing 80 790 75 150 – –

Stock broking clients 145 424 251 057 – –

Loans to associates 10 462 6 013

Other receivables 58 447 51 693 767 18

298 776 394 783 767 18

Where other receivables are not reflected at fair

value, the carrying value is a reasonable

approximate for fair value

Premier Freight (Pty) Limited’s accounts receivable of R65,2 million have been ceded to First National Bank, a division of FirstRand Bank Limited, to secure banking facilities granted to the company

In addition to this, the Credit Guarantee Insurance policy over Premier Freight (Pty) Limited's accounts receivable has been ceded to the bank


:5300:53



5. LOANS AND ADVANCES

Originated loans

Category analysis

Instalment finance 1 091 076 915 915 – –

Debtor finance 137 225 102 452 – –

Trade finance 277 840 203 983 – –

Property 46 187 –

Other loans 26 342 – –

Gross advances 1 552 354 1 222 692 – –

Less: specific impairment 37 049 26 510 – –

portfolio impairment 7 104 7 104 – –

1 508 201 1 189 078 – –

Where loans and advances are not reflected at

fair value, the carrying value is a reasonable

approximate for fair value

Advances of Sasfin Asia Limited and SasCred

Financial Services Limited ceded as security for

trade finance related facilities 214 455 136 330 – –

Advances of South African Securitisation Programme

(Pty) Limited ceded as security for investment securities

issued as per note 15 693 330 692 315 – –

Sectoral analysis

Agriculture 10 048 9 398 – –

Community, social and personal services 293 214 235 139 – –

Construction 30 035 25 896 – –

Electricity and water 9 902 9 706 – –

Finance, real estate and business services 351 023 242 228 – –

Manufacturing 254 298 226 216 – –

Mining 19 969 16 658 – –

Trade and accommodation 478 624 390 213 – –

Transport and communication 104 863 67 238 – –

Other 378 – – –

1 552 354 1 222 692 – –

Group Company

2007 2006 2007 2006R’000 R’000 R’000 R’000




:5400:54


5. LOANS AND ADVANCES (continued)

Geographic analysis

South Africa 1 518 969 1 221 373 – –

Malawi 5 889 1 098 – –

Mauritius 25 198 – – –

Australia 2 298 221 – –

1 552 354 1 222 692 – –

Maturity analysis

Maturing within one year 511 913 350 806 – –

Maturing after one year but within five years 1 026 907 871 886 – –

Maturing after five years 13 534 – – –

1 552 354 1 222 692 – –


periods to contractual maturity from year-end

IMPAIRMENTS

Balance at the beginning of the year 33 614 25 631 – –

Net write offs 194 412 – –

Charge to the income statement 10 345 7 571 – –

Specific impairments raised 10 345 6 287 – –

Portfolio impairments raised – 1 284 – –

Balance at the end of the year 44 153 33 614 – –

Group Company

2007 2006 2007 2006R’000 R’000 R’000 R’000


:5500:55



5. LOANS AND ADVANCES (continued)

NON-PERFORMING ADVANCES

Instalment finance 30 766 8 594 22 172 22 172

Debtor finance 5 120 2 284 2 836 2 836

Trade finance 35 433 23 417 12 016 12 016

Other loans 26 1 25 25

71 345 34 296 37 049 37 049

Sectoral analysis

Agriculture 152 57 95 95

Community, social and personal services 11 749 11 063 686 686

Construction 8 407 1 676 6 731 6 731

Finance, real estate and business services 11 484 3 193 8 291 8 291

Manufacturing 135 – 135 135

Mining 29 347 15 826 13 521 13 521

Trade and accommodation 4 475 980 3 495 3 495

Transport and communication 5 596 1 501 4 095 4 095

71 345 34 296 37 049 37 049

Group 2006

EstimatedOutstanding recoverable Net Specific

balance amount exposure impairment

R'000 R'000 R'000 R'000

NON-PERFORMING ADVANCES

Instalment finance 25 995 6 905 19 090 19 090

Debtor finance 11 720 8 399 3 321 3 321

Trade finance 26 026 22 269 3 757 3 757

Other loan 342 – 342 342

64 083 37 573 26 510 26 510

Sectoral analysis

Agriculture 200 54 146 146

Community, social and personal services 6 974 3 362 3 612 3 612

Construction 681 121 560 560

Finance, real estate and business services 6 763 1 033 5 730 5 730

Manufacturing 10 333 2 905 7 428 7 428

Mining 192 92 100 100

Trade and accommodation 36 471 29 195 7 276 7 276

Transport and communication 2 469 811 1 658 1 658

64 083 37 573 26 510 26 510

Group 2007

EstimatedOutstanding recoverable Net Specific

balance amount exposure impairment

R'000 R'000 R'000 R'000




:5600:56


6. INVESTMENT SECURITIES

Listed

Available-for-sale portfolio 7 763 5 750 – –

Financial instruments held at fair value through

profit and loss 41 115 2 356 41 115 2 356

Unlisted

Available-for-sale portfolio 154 155 – –

Financial instruments held at fair value through

profit and loss 129 180 52 896 – –

178 212 61 157 41 115 2 356

Detailed information of all investments is obtainable

from the Company Secretary

7. INVESTMENTS IN ASSOCIATED AND JOINT

VENTURE COMPANIES

7.1 Investments in associated and joint

venture companies

Shares at book value 50 491 44 773 70 526 66 748

Equity accounted earnings 9 648 4 640 – –

60 139 49 413 70 526 66 748

Summarised financial information of

associated companies equity accounted, loans

receivable are not included in the net

investment above:

Group Company

2007 2006 2007 2006R’000 R’000 R’000 R’000


:5700:57



7. INVESTMENTS IN ASSOCIATED AND JOINT VENTURE COMPANIES (continued)7.1 Investments in associated and joint

venture companies (continued)

InnoVent Rental and Asset Management Solutions (Pty) LimitedCarrying value 19 600 10 521 Balance sheetNon-current assets 34 827 16 793 Current assets 30 121 14 110 Non-current liabilities 9 217 5 965 Current liabilities 28 761 12 603

Equity 26 970 12 335

Total revenue 154 092 114 709

Total net profit after tax 10 382 7 317

Share of income - current year 4 913 4 321

Equity accounted earnings 9 057 4 144

Loan to the company 10 543 6 013

The loan is unsecured, interest-free and is repayable by no later than 30 November 2008

Pioneer Employee Benefits (Pty) LimitedCarrying value 591 444 Balance sheetNon-current assets 21 54 Current assets 3 493 2 612 Non-current liabilities – 9 Current liabilities 1 545 1 515

Equity 1 969 1 142

Total revenue 3 549 2 937

Total net profit after tax 747 584

Share of income – current year 271 319

Equity accounted earnings 591 444

Group Company

2007 2006 2007 2006R’000 R’000 R’000 R’000




:5800:58


7. INVESTMENTS IN ASSOCIATED AND JOINT VENTURE COMPANIES (continued)7.1 Investments in associated and joint

venture companies (continued)

SasCred Financial Services LimitedCarrying value – 17 352 Balance sheetCurrent assets – 29 148 Current liabilities – 18 022

Equity – 11 126

Total revenue – 17 172

Total net profit after tax – 9 395

Share of income – 10 116

Loan to the Company – 6 470

The loan was unsecured, interest-free and is

repayable within three months.

The remaining 50% interest in this joint venture

company was acquired by Sasfin Asia Limited on

30 June 2007 and SasCred is now a wholly-owned

subsidiary of Sasfin Asia Limited and Sasfin Bank

Limited

This does not change the effect of the previously-proportionately, consolidated results. Goodwill recognised as a result of the acquisition amounted to R305 000 (refer notes 10 and 31)

Group Company

2007 2006 2007 2006R’000 R’000 R’000 R’000


:5900:59



7. INVESTMENTS IN ASSOCIATED AND JOINT VENTURE COMPANIES (continued)

7.2 Investments in joint ventures proportionately

consolidated

Hecny Transportation South Africa

(Pty) Limited

Group's proportionate share of assets and

liabilities which is included in the figures of

the consolidated financial statements:

Property and equipment 62 62

Accounts receivable 8 017 8 017

Accounts payable 3 669 3 669

Net assets 4 410 4 410

Group's proportionate share of income and

expenses which is included in the figures of

the consolidated financial statements:

Net interest income 226 202

Other income 5 987 5 233

Operating expenses 3 018 2 844

Net income before taxation and minority

interest 3 195 2 591

A schedule of associated and joint venture

companies appears in note 38

8. SUBSIDIARY COMPANIES

Unlisted investments

Shares at carrying value – ordinary shares 21 974 21 912

Loans 103 918 138 781

Share-based payment reserve 1 103 1 109

126 995 161 802

The loans to subsidiaries are unsecured, interest-free

and there is no expectation of repayment

A detailed schedule of subsidiary companies

appears in note 38

Group Company

2007 2006 2007 2006R’000 R’000 R’000 R’000




:6000:60


9. PROPERTY AND EQUIPMENT

2007

Movement

Cost at the beginning of the year 29 153 75 597 104 750

Additions 58 23 126 23 184

Disposals – (15 491) (15 491)

Cost at the end of the year 29 211 83 232 112 443

Accumulated depreciation and impairment losses at the beginning

of the year 2 648 52 726 55 374

Depreciation charge for the year 504 11 285 11 789

Disposals – (15 264) (15 264)

Accumulated depreciation and impairment losses at the end of the year 3 152 48 747 51 899

Carrying amount at the end of the year 26 059 34 485 60 544

2006

Movement

Cost at the beginning of the year 27 865 67 618 95 483

Additions 1 288 14 748 16 036

Disposals – (6 769) (6 769)

Cost at the end of the year 29 153 75 597 104 750

Accumulated depreciation and impairment losses at the beginning

of the year 2 155 50 085 52 240

Depreciation charge for the year 493 7 439 7 932

Disposals – (4 798) (4 798)

Accumulated depreciation and impairment losses at the end of the year 2 648 52 726 55 374

Carrying amount at the end of the year 26 505 22 871 49 376

Land and buildings are encumbered for unutilised interbank facilities provided to Sasfin Bank Limited.

The fair value of land and buildings as estimated by management amounted to R40 million at 30 June 2007.

Details of the land and buildings are obtainable from the Company Secretary.

Land andbuildings Equipment Total

R'000 R'000 R'000


:6100:61



10. INTANGIBLE ASSETS AND GOODWILL

Intangible assets

Software development

Cost at the beginning of the year 5 656 – – –

Additions at cost 2 935 5 656 – –

Allocated to property and equipment (5 862) – – –

Impairment – – – –

Cost at the end of the year 2 729 5 656 – –

Goodwill

Cost at the beginning of the year 3 424 – – –

Additions at cost 305 3 424 – –

Impairment – – – –

Cost at the end of the year 3 729 3 424 – –

Total 6 458 9 080 – –

Goodwill represents the excess of the fair value of

certain assets and liabilities acquired by the Group

during the course of the year

Impairment testing of goodwill is done annually,

or more frequently if required, by comparing the

net carrying value of the cash-generating units to

the estimated value in use. No impairments resulting

from impairment testing are required in this period.

Accounting estimates and assumptions applied in

testing for impairment of goodwill are detailed in

note 39


Group Company

2007 2006 2007 2006R’000 R’000 R’000 R’000



:6200:62


11. DEFERRED TAX

Deferred tax on temporary differences arising from:

Instalment finance (29 081) (31 142) – –

Tax losses 2 488 – – –

Fair value adjustments (15 564) (14 693) – –

Debt securities issued – (1 643) – –

Provisions 8 431 8 168 – –

Other (5 321) (4 244) – –

(39 047) (43 554) – –

Deferred taxation asset 2 856 463 – –

Deferred taxation liability (41 903) (44 017) – –

(39 047) (43 554) – –

12. DEPOSITS FROM BANKS

Call funding 29 186 78 512 – –

29 186 78 512 – –

13. DEPOSITS FROM CUSTOMERS

Category analysis

Demand deposits 556 858 492 809 – –

Notice deposits 12 997 5 765 – –

Fixed deposits 175 926 127 965 – –

Negotiable certificates of deposit – 312 – –

745 781 626 851 – –

Geographic analysis

South Africa 740 365 621 313 – –

North America 144 317 – –

Australia and New Zealand 4 401 4 094 – –

United Kingdom 141 130 – –

Israel 730 997 – –

745 781 626 851 – –

Group Company

2007 2006 2007 2006R’000 R’000 R’000 R’000


:6300:63



13. DEPOSITS FROM CUSTOMERS (continued)

Maturity analysis

Withdrawable on demand 556 858 492 809 – –

Maturing within one month 73 212 50 104 – –

Maturing after one month but within six months 91 349 60 744 – –

Maturing after six months but within 12 months 16 862 3 923 – –

Maturing after one year but within five years 7 500 19 271 – –

745 781 626 851 – –



14. OTHER PAYABLESCapitalised finance leases 2 007 2 698 – –Derivative liabilities 2 433 1 579 – –Audit fees and other services 2 688 2 239 398 80 Accounts payable 84 041 53 681 217 302 Stock broking clients 144 050 260 703 – –

61 552 140 610 – –

Amounts due to clients 1 424 177 1 359 052 – –Less: JSE trustees (670 774) (649 369) – –

Borrowers control (670 540) (560 738) – –JSE trustees – financial Rand (21 311) (8 335) – –

Overseas brokers on market deals 364 13 766 – –Brokers on market deals 48 598 86 604 – –Marketable and uncertified securities taxes 30 685 19 153 – –Dividends payable 2 851 570 – –

235 219 320 900 615 382

Where other payables are not reflected at fair value, the carrying value is a reasonable approximate for fair value.

Group Company

2007 2006 2007 2006R’000 R’000 R’000 R’000




:6400:64


15. DEBT SECURITIES ISSUEDAmortised costCategory analysisClass A notesUnsubordinated, secured, compulsory redeemable, asset-backed notes of R1 000 000 each 617 481 613 690 – –Class B notesSubordinated, secured, compulsory redeemable, asset-backed notes of R1 000 000 each 44 370 44 097 – –Class C notesSubordinated, secured, compulsory redeemable, asset-backed notes of R1 000 000 each 13 123 13 043 – –

674 974 670 830 – –

The notes are secured by a cession of rentals and equipment underlying the instalment finance assets as well as the bank accounts owned by South African Securitisation Programme (Pty) Limited – refer to notes 2 and 5. The Class A notes bear interest at three- month JIBAR plus 0,52%, the Class B notes at three-month JIBAR plus 1,39% and the Class C notes at three-month JIBAR plus 2,25%. The Class B and Class C notes are subordinated in favour of the Class A notes and the Class C notes are subordinated in favour of the Class B notes.

Geographic analysisSouth Africa 674 974 670 830 – –

674 974 670 830 – –

Maturity analysisMaturing after one year but within five years 674 974 670 830 – –

674 974 670 830 – –

The maturity analysis is based on the remaining period to contractual maturity from year-end

Group Company

2007 2006 2007 2006R’000 R’000 R’000 R’000


:6500:65



16. PROVISIONS

Leave pay 5 074 4 525 – –

Opening balance 4 525 4 063 – –

Charge to the income statement 1 057 781 – –

Utilised during the year (508) (319) – –

Staff incentives 6 383 6 145 – –

Opening balance 6 145 4 176 – –

Charge to the income statement 7 336 8 160 – –

Utilised during the year (7 098) (6 191) – –

11 457 10 670 – –

17. ORDINARY SHARE CAPITAL

Authorised

Group and Company: 40 000 000 (2006: 40 000 000)

ordinary shares of 1 cent each 400 400 400 400

Issued

Group: 27 013 374 (2006: 26 586 328)

ordinary shares of 1 cent each

Company: 27 013 374 (2006: 26 665 291)

ordinary shares of 1 cent each

Balance at the beginning of the year 266 260 266 260

Issued during the year 4 6 4 6

Balance at the end of the year 270 266 270 266

The Company issued 348 083 (2006: 562 304)

shares to the Sasfin Share Incentive Trust

The unissued shares are under the control of the

directors until the next Annual General Meeting

18. ORDINARY SHARE PREMIUM

Balance at the beginning of the year 23 259 19 554 23 905 20 463

Issued during the year 2 174 3 705 1 910 3 442

Balance at the end of the year 25 433 23 259 25 815 23 905

Group Company

2007 2006 2007 2006R’000 R’000 R’000 R’000




:6600:66


19. PREFERENCE SHARE CAPITALAuthorisedGroup and Company: 5 000 000 (2006: 5 000 000) non-redeemable, non-cumulative, non-participating preference shares of 1 cent each 50 50 50 50

IssuedGroup and Company: 1 905 000 (2006: 1 905 000) preference shares of 1 cent each

Balance at the beginning of the year 19 10 19 10 Issued during the year – 9 – 9

19 19 19 19

The preference shares were listed under the Specialist Securities – Preference Shares sector of the JSE. Dividends are paid semi-annually at 75% of the prime rate

20. PREFERENCE SHARE PREMIUMBalance at the beginning of the year 199 259 99 636 199 259 99 636 Issued during the year – 99 994 – 99 994 Set off of costs relating to issue of shares – (371) – (371)

Balance at the end of the year 199 259 199 259 199 259 199 259

21. COMMITMENTS AND CONTINGENCIESCommitments Capital expenditure authorised and contracted for 1 975 3 425 – –

Proposed acquisition of SBM Nedbank International Limited for a purchase consideration of USD24 million. This transaction has subsequently been cancelled – 171 833 – –

Non-cancellable operating lease rentals for premises are payable as follows:One year 2 711 3 115 – –One to five years 9 728 6 191 – –

Funds to meet these commitments will be provided from internal Group resources

ContingenciesUnutilised letters of credit established and confirmed orders placed on behalf of clients 60 936 45 483 – –Guarantees 25 768 35 136 – –

101 118 265 183 – –

Guarantees have been issued by the Group on behalf of clients and to secure banking facilities

Group Company

2007 2006 2007 2006R’000 R’000 R’000 R’000


:6700:67



22. INTEREST INCOME

Interbank 51 241 28 980 – –

Short-term negotiable securities 2 347 1 674 – –

Instalment finance 151 814 134 315 – –

Debtor finance 16 716 13 682 – –

Trade finance 33 003 25 210 – –

Property loans 2 148 – – –

Other 4 486 1 282 5 705 1

261 755 205 143 5 705 1

23. INTEREST EXPENSE

Interbank funding 2 360 1 768 – –

Demand deposits 46 037 24 532 – –

Notice deposits 557 358 – –

Fixed deposits 11 571 11 570 – –

Negotiable certificates of deposit 8 101 – –

Notes 66 149 53 937 – –

Other – 286 2 646 198

126 682 92 552 2 646 198

24. OTHER INCOME

Fee and commission income 334 221 280 193 1 128 1 068

Dividend income 13 365 1 144 67 180 45 510

Fair value adjustments on financial instruments

held at fair value through profit and loss 41 396 8 213 (871) –

Profit on disposal of property and equipment 119 1 573 – 1 573

Profit on disposal of available-for-sale investments – 54 910 – –

Foreign exchange gains 885 20 264 – –

389 986 366 297 67 437 48 151

Group Company

2007 2006 2007 2006R’000 R’000 R’000 R’000




:6800:68


25. PROFIT FROM OPERATIONS

Profit from operations is stated after charging:

Auditors' remuneration 4 999 2 802 912 149

Audit fees – current year 3 525 2 306 398 149

– under provision prior year 725 – 512 –

Other services 749 496 2 –

Consulting fees 3 905 2 770 – 1

Depreciation 11 789 7 932 – –

Directors' emoluments 9 500 7 924 479 459

Executive directors

– For other services rendered to the Bank 7 882 7 006 – –

Non-executive directors

– Directors' fees paid by the Company 1 139 459 479 459

– Directors' fees paid by the Bank 479 459 – –

Operating lease charges 7 050 3 980 – –

– Premises 6 962 2 059 – –

– Equipment 88 1 921 – –

Employee benefit cost 7 008 8 441 – –

Share-based payment costs 1 186 1 109 542 –

And after crediting:

Profit on disposal of property and equipment 119 155 – –

Profit on disposal of investments 50 56 483 – 1 573

Foreign exchange gains 885 20 264 – –

Administration fees received from Group companies – – 1 128 1 068

Group Company

2007 2006 2007 2006R’000 R’000 R’000 R’000


:6900:69



26. INCOME TAX EXPENSE

South African normal tax 48 962 55 313 705 185

Current tax – current year 50 428 48 791 705 185

– (over)/under provision in prior years (2 620) 5 704 – –

Deferred tax – current year 1 263 818 – –

Deferred tax – over provision in prior years (109) – – –

Secondary tax on companies 7 639 159 – 552

56 601 55 472 705 737

Reconciliation of rate of taxation % % % %

South African normal tax rate 29,0 29,0 29,0 29,0

Adjusted for: (4,2) (4,9) (28,0) (27,4)

Revaluation of investments (2,2) - - -

Exempt income (2,3) (0,8) (28,5) (28,1)

Non-deductible expenses 0,1 0,8 - 0,1

Capital gains 0,1 (4,2) 0,4 (0,5)

Foreign entity (2,9) (1,3) - -

Tax losses utilised (0,3) (2,5) - (0,1)

(Over)/under provision in prior years (1,3) 2,5 - -

Secondary tax on companies 3,4 0,1 - 1,2

Other 1,2 0,5 0,1 -

Effective rate 24,8 24,1 1,0 1,6

Losses, balance of allowances and credits for which

no deferred tax asset has been raised:

– Estimated tax losses available to offset future

taxable income 10 400 7 251 – –

– Accumulated STC credits which have arisen as a

result of dividends received exceeding dividends

declared – 21 030 – –

Group Company

2007 2006 2007 2006R’000 R’000 R’000 R’000




:7000:70


27. EARNINGS PER SHARE

27.1 Headline earnings

Headline earnings are determined as follows:

Equity holders of the parent 139 919 156 449 51 297 38 212

Net profit on disposal of property and equipment (119) (155) – –

Net profit on disposal of investments, net of

capital gains tax – (50 244) – (1 573)

139 800 106 050 51 297 36 639

The R50,2 million in 2006 represents the net

capital profit from the sale of shares in the JSE.

The JSE shares were classified as

available-for-sale financial instruments

27.2 Weighted average number of ordinary shares

Weighted average number of ordinary shares

at 30 June 26 714 26 271 26 714 26 271

Effect of share options 486 833 486 833

Weighted average number of ordinary shares

(diluted) at 30 June 27 200 27 104 27 200 27 104

Group Group

Cents Cents

2007 2006

27.3 Headline earnings per ordinary share

The calculation of headline earnings per ordinary share is based on headline earnings

of R139,8 million (2006: R106 million) and the weighted average of 26 713 897

(2006: 26 271 201) ordinary shares in issue for the year 523 404

27.4 Earnings per ordinary share

The calculation of earnings per ordinary share is based on earnings of R139,9 million

(2006: R156,4 million) and the weighted average of 26 713 897 (2006: 26 271 201)

ordinary shares in issue for the year 524 596

27.5 Diluted headline earnings per ordinary share

The calculation of diluted headline earnings per ordinary share is based on headline

earnings of R139,8 million (2006: R106 million) and diluted shares of 27 199 842

(2006: 27 104 296) 514 391

27.6 Diluted earnings per ordinary share

The calculation of diluted earnings per ordinary share is based on earnings of

R139,9 million (2006: R156,4 million) and diluted shares of 27 199 842 (2006: 27 104 296) 514 577

Group Company

2007 2006 2007 2006R’000 R’000 R’000 R’000


:7100:71



28. CASH RECEIPTS FROM CUSTOMERS

Interest income 261 755 205 143 5 705 1

Other income 353 605 313 936 68 308 46 578

615 360 519 079 74 013 46 579

CASH PAID TO CUSTOMERS, EMPLOYEES

AND SUPPLIERS

Interest expense 126 682 92 552 2 646 198

Total operating expenses 280 133 237 512 2 590 1 020

406 815 330 064 5 236 1 218

Cash inflow from operating activities 208 545 189 015 68 777 45 361

RECONCILIATION OF OPERATING PROFIT TO

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before taxation 227 976 230 150 67 906 46 934

Profit on disposal of investments (50) (56 483) – (1 573)

Profit on disposal of property and equipment (119) (155) – –

Impairment losses on loans and advances 10 345 7 571 – –

Fair value adjustments on financial instruments

held at fair value through profit and loss (41 396) – 871 –

Depreciation 11 789 7 932 – –

208 545 189 015 68 777 45 361

29. TAXATION PAID

Unpaid at the beginning of the year 83 053 56 314 185 –

Charge to the income statement 56 601 55 472 705 737

Unpaid at the end of the year (71 064) (83 053) (705) (185)

68 590 28 733 185 552

30. DIVIDENDS PAID

Charge to distributable reserves 61 906 47 671 62 022 47 749

61 906 47 671 62 022 47 749

Group Company

2007 2006 2007 2006R’000 R’000 R’000 R’000




:7200:72


31. ACQUISITION OF SUBSIDIARY

Net cash cost of acquisition of subsidiary 639 – – –

Comprising:

Cash and balances with banks 3 863 – – –

Other receivables 2 519 – – –

Total assets acquired 6 382 – – –

Other payables (6 048) – – –

Net asset value 334 – – –

Goodwill 305 – – –

Cash consideration 639 – – –

The subsidiary acquired consisted of the remaining

50% interest in SasCred Financial Services Limited.

SasCred Financial Services Limited was previously

accounted for as a joint venture. The acquisition

was made on 30 June 2007

32. CASH AND CASH EQUIVALENTS AT END OF

THE YEAR

Cash and cash balances 394 394 681 635 – –

Short-term negotiable securities 35 372 24 922 – –

Deposits from banks (29 186) (78 512) – –

400 580 628 045 – –

33. FUNDS UNDER ADMINISTRATION

Sasfin Securities (Pty) Limited, in a fiduciary

capacity on behalf of clients, administers client funds

in respect of the following:

On a discretionary basis

Unlisted equities 105 319 83 199 – –

Listed equities 30 582 632 20 549 422 – –

Gilts 124 546 146 355 – –

Unit trusts 205 145 – –

Funds held in money market accounts 1 341 313 1 218 448 – –

32 154 015 21 997 569 – –

Group Company

2007 2006 2007 2006Cents Cents Cents Cents


:7300:73



34. RELATED PARTY TRANSACTIONS

The following are defined as related parties of the Group:

• Subsidiaries (refer to note 38)

• Associated undertakings and joint ventures (refer to note 38)

• Post retirement funds

• Key management personnel

IAS 24 Related Parties requires the identification of "key management personnel". Accordingly, the Group has defined key

management personnel as those persons having authority and responsibility for planning, directing and controlling the

activities of the Company, directly or indirectly, including any director (whether executive or otherwise) of the Company as

well as close members of the family of any of these individuals. Key management personnel are considered to be the directors

of the Company.

Details of directors’ emoluments and shareholding are disclosed in the Directors' Report on pages 34 and 35.

Sasfin Holdings Limited has advanced loans to related parties as set out in notes 8 and 38. The Group advanced loans to

associates as set out in notes 4 and 7. Income received by the Company from Group companies is set out in note 25.

Related party transactions are made on the same terms that prevail in an arm’s length transaction, except for the loans

detailed in note 38.

The analysis of major ordinary shareholders of the Company is disclosed on page 92.

Staff, including directors, transacting through the Group’s stockbroker, Sasfin Securities (Pty) Limited, are entitled to a

reduced rate on brokerage.

35. DIRECTORS' SERVICE CONTRACTS

None of the directors retiring at the forthcoming Annual General Meeting has service contracts with notice periods in excess

of one year.

36. HOLDING COMPANY GUARANTEES

Sasfin Holdings Limited has provided guarantees for the obligations of interbank facilities for the trade finance related

business in Sasfin Asia Limited and SasCred Financial Services Limited.




:7400:74


37. FINANCIAL INSTRUMENTS AND

RISK MANAGEMENT

37.1 Liquidity risk

2007

Assets

Cash and cash balances 386 394 8 000 – – – 394 394

Short-term negotiable securities 35 372 – – – – 35 372

Other receivables 298 776 – – – – 298 776

Loans and advances 255 159 263 480 403 208 586 354 – 1 508 201

Investment securities – – – – 178 212 178 212

Investments in associated and

joint venture companies – – – – 60 139 60 139

Deferred tax asset – – – – 2 856 2 856

Intangible assets and goodwill – – – – 6 458 6 458

Property and equipment – – – – 60 544 60 544

Total assets 975 701 271 480 403 208 586 354 308 209 2 544 952

Liabilities

Deposits from banks 29 186 – – – – 29 186

Deposits from customers 630 070 91 349 16 862 7 500 – 745 781

Other payables 235 219 – – – – 235 219

Provisions – – 11 457 – – 11 457

Debt securities issued – – – 674 974 – 674 974

Taxation – – 32 017 – – 32 017

Deferred tax liability – – – – 41 903 41 903

Total liabilities 894 475 91 349 60 336 682 474 41 903 1 770 537

Maturity mismatch 81 226 180 131 342 872 (96 120) 266 306 774 415

Unutilised committed

interbank facilities 255 557 – – – – 255 557

Net maturity mismatch 336 783 180 131 342 872 (96 120) 266 306 1 029 972

Up to 1 1-3 4-12 1-5 Non Group

month months months years liquid Total

R'000 R'000 R'000 R'000 R'000 R'000


:7500:75





RISK MANAGEMENT (continued)

37.1 Liquidity risk (continued)

2006

Assets

Cash and cash balances 656 635 25 000 – – – 681 635

Short-term negotiable securities 20 955 3 967 – – – 24 922

Other receivables 394 783 – – – – 394 783

Loans and advances 113 038 205 776 340 736 529 528 – 1 189 078


Investments in associated and

joint venture companies – – – – 49 413 49 413

Deferred tax asset – – – – 463 463



Total assets 1 185 411 234 743 340 736 529 528 169 489 2 459 907

Liabilities



Other payables 320 900 – – – – 320 900

Provisions 10 670 – – – – 10 670

Debt securities issued – – – 670 830 – 670 830

Taxation 1 134 – – 38 365 – 39 499



Maturity mismatch 231 282 173 999 336 813 (198 938) 125 472 668 628

Unutilised committed

interbank facilities 177 000 – – – – 177 000

Net maturity mismatch 408 282 173 999 336 813 (198 938) 125 472 845 628

The matching of the maturities of assets and liabilities is inherent in the activities of all banks, and it is unusual for

banks ever to be perfectly matched. The table reflects on balance sheet maturity categories of the assets and liabilities

of the Group according to their contractual repayment terms.



R'000 R'000 R'000 R'000 R'000 R'000



:7600:76




37.2 Interest rate risk

2007

Assets

Cash and cash balances 370 240 8 000 – – 16 154 394 394

Short-term negotiable securities 35 372 – – – – 35 372

Loans and advances* 1 406 097 105 253 41 004 – (44 153) 1 508 201

Other receivables – – – – 298 776 298 776


Investments in associated

and joint venture companies – – – – 60 139 60 139

Deferred tax asset – – – – 2 856 2 856



Total assets 1 811 709 113 253 41 004 – 578 986 2 544 952

Liabilities



Other payables – – – – 235 219 235 219

Provisions – – – – 11 457 11 457

Debt securities issued – 674 974 – – – 674 974

Taxation – – – – 32 017 32 017



Net interest rate risk mismatch 1 152 453 (653 070) 24 142 (7 500) 258 390 774 415



R'000 R'000 R'000 R'000 R'000 R'000


:7700:77





37.2 Interest rate risk (continued)

2006

Assets

Cash and cash balances 646 643 25 000 – – 9 992 681 635

Short-term negotiable securities 20 955 3 967 – – – 24 922

Loans and advances* 1 099 812 77 373 45 507 – (33 614) 1 189 078

Other receivables – – – – 394 783 394 783


Investments in associated

and joint venture companies – – – – 49 413 49 413

Deferred tax asset – – – – 463 463



Total assets 1 767 410 106 340 45 507 – 540 650 2 459 907

Liabilities



Other payables – – – – 320 900 320 900

Provisions – – – – 10 670 10 670

Debt securities issued – 670 830 – – – 670 830

Taxation – – – – 39 499 39 499



Net interest rate risk mismatch 1 145 985 (625 234) 41 584 (19 271) 125 564 668 628

The Group is exposed to interest rate risks associated with fluctuations in the market prices of assets and liabilities.

These fluctuations in market prices impact on the value of instruments stated at fair value, and interest income or the

cost of instruments stated at original cost and future cash flows of all interest rate sensitive items. The tables summarise

the Group's exposure to interest rate risk through categorisation of assets and liabilities into maturity categories,

determined as being the earlier of the contractual re-pricing date or maturity. Assets and liabilities not directly affected

by changes in interest rates are reflected separately as non-interest sensitive items.

* A substantial portion of the instalment finance advances reprice as interest rates increase but are not linked to any

downward interest rate movements.



R'000 R'000 R'000 R'000 R'000 R'000




:7800:78


37. FINANCIAL INSTRUMENTS AND RISK

MANAGEMENT (continued)

37.3 Currency risk

The Group incurs currency risk as a result of

services acquired from foreign suppliers.

The currencies in which the Company

primarily deals are US Dollars, Pound Sterling

and Euros. The Group utilises forward

exchange contracts to hedge their estimated

future foreign currency exposure from

purchases:

The net open position of the Group at year-

end from trading activities 2 266 10 412 – –

A multi-currency option was entered into, where

the South African Rand was hedged against a

weakest basket of currencies. A premium of

R4,85 million was paid. The option was entered

into in order to hedge its US Dollar denominated

investment in its foreign subsidiary

Fair value of the currency option at year-end 3 640 – – –

Cash held and forward exchange contacts

entered into to hedge the acquisition of SBM

Nedbank International Limited – 111 972 – –

5 906 122 384 – –

The foreign exchange rates prevailing at

balance sheet date are:

Pound Sterling 14,21 13,15 – –

US Dollar 7,08 7,13 – –

Euro 9,57 9,10 – –

Group Company

2007 2006 2007 2006R’000 R’000 R’000 R’000


:7900:79



37. FINANCIAL INSTRUMENTS AND RISK

MANAGEMENT (continued)

37.4 Derivative financial instruments

2007

Hedging

Exchange rate contracts

Forwards maturing within one year 194 280 3 653 (2 433) 1 220

Total derivatives 194 280 3 653 (2 433) 1 220

2006

Hedging

Exchange rate contracts

Forwards maturing within one year 96 524 10 870 (1 579) 9 291

Total derivatives 96 524 10 870 (1 579) 9 291

Hedging

Forward exchange contracts are entered into as fair value hedges for foreign currency liabilities.

Two equity derivatives were entered into in order to hedge underlying private equity investments at a cost of R292 000.

The fair value of the derivatives at year end were R34 000.

Derivative instruments

These transactions have been entered into in the normal course of business and no material losses are anticipated other

than those for which provision has been made in the income statement. There are no commitments or contingent

commitments under derivative financial instruments that are settled other than with cash.

Notional principal

Represents the gross notional value of all outstanding contracts as at year end. The gross notional value is the sum of

the absolute value of all purchases and sales of derivative instruments. This value will not affect the amount receivable

or payable under a derivative contract due to the cash-settled nature of the various contracts. The gross notional value

represents only the measure of involvement by the Group in derivative contracts and not its exposure to market or

credit risks arising from such contracts

Fair value of assets and liabilities

The amounts disclosed represent the fair value of all derivative instruments held at year end. The fair value of a

derivative financial instrument represents the market value if the rights and obligations arising from that instrument

were closed out by the Group in normal trading conditions as at year-end. Fair values are obtained from quoted market

prices and discounted cash flow models.

37.5 Credit risk

Details of Credit Risk Management procedures are set out in the Risk Management Report on pages 17 to 19. Information

regarding loans and advances is set out in note 5.


Notional Positive Negative Net fair

principal fair value fair value value

R'000 R'000 R'000 R'000



:8000:80


38. SUBSIDIARY

COMPANIES, SPECIAL

PURPOSE ENTITIES,

ASSOCIATED AND JOINT

VENTURE COMPANIES

SUBSIDIARIES

Of Sasfin Holdings Limited

Sasfin Bank Limited Bank R1 149 376 – 90 90 8 246 9 355 29 271 98 837

Premier Freight Freight forwarding R317 – 63 63 13 566 13 566 – –(Pty) Limited and customs

clearing

Sasfin Properties Property holding R100 – 100 100 – – – –(Pty) Limited company

Sasfin Properties Property holding R1 – 100 100 – – – –II (Pty) Limited company

Sasfin Financial Investment R12 494 – 90 – 11 – (11) –Services (Pty) Limited holding

company

Sasfin Private Investment R100 000 – 100 100 150 100 74 299 39 288 Equity Investment holding Holdings (Pty) Limited company

ASSOCIATED COMPANIESInnoVent Investment Asset based R1 000 – 33,6 33,6 82 82 – –Holdings (Pty) Limited finance

OTHERThe Sasfin Share Group share – – – – 1 103 – 359 656 Incentive Trust incentive scheme

InnoVent SPV 1 Investment R100 R26 666 000 – – 28 177 26 666 – –(Pty) Limited holding

InnoVent SPV 2 Investment R100 R40 000 000 – – 42 267 40 000 – –(Pty) Limited holding

93 602 89 769 103 918 138 781

Nature of Issued Issued Effective Shares at Indebtedness

business ordinary preference holding book value

capital capital

2007 2006 2007 2006 2007 2006

% % R'000 R'000 R'000 R'000


:8100:81



38. SUBSIDIARY COMPANIES, SPECIAL PURPOSE ENTITIES, ASSOCIATED AND JOINT VENTURE COMPANIES

SUBSIDIARIES

Of Sasfin Bank Limited

Quorum Leasing Instalment R100 – 100 100Services (Pty) Limited sale finance

Sasfin Private Private equity R100 – – 100Equity Fund Managers(Pty) Limited

Sasfin Asia Overseas HK$1 500 000 – 100 100Limited trade finance(incorporated in Hong Kong)

Sasfin Securities Member of R100 – – 100(Pty) Limited the JSE

Sasfin Financial Financial R270 – – 75Advisory Services advisory services(Pty) Limited

Sasfin Asset Managers Asset R100 – – 50(Pty) Limited management

Of Sasfin Asia Limited

SasCred Financial International GBP50 000 – 100 –Services Limited trade finance(incorporated in and wealthJersey) management



capital capital

2007 2006 2007 2006 2007 2006

% % R'000 R'000 R'000 R'000




:8200:82



SUBSIDIARIES

Of Sasfin Financial Services(Pty) Limited

Sasfin Securities Member of R100 – 100 –(Pty) Limited the JSE

Sasfin Private Equity Private equity R100 – 100 –Fund Managers(Pty) Limited

Sasfin Financial Financial R270 – 75 –Advisory Services advisory (Pty) Limited services

Sasfin Asset Managers Asset R100 – 100 –(Pty) Limited management

Of Sasfin FinancialAdvisory Services(Pty) Limited

Sasfin Insurance Insurance R1 – 100 100 Brokers (Pty) Limited brokers

SPECIAL PURPOSE ENTITIES

Of Sasfin Bank Limited

South African Securitisation R100 000 – 100 100 Securitisation vehicleProgramme(Pty) Limited



capital capital

2007 2006 2007 2006 2007 2006

% % R'000 R'000 R'000 R'000


:8300:83




ASSOCIATEDCOMPANIES

Of Sasfin Financial Services (Pty) Limited

Pioneer Employee Pension fund R100 – 30 30 Benefits (Pty) Limited administrators

JOINT VENTURE COMPANIES

Of Premier Freight (Pty) Limited

Hecny International R3 750 – 31,5 31,5Transportation freight South Africa forwarders(Pty) Limited

Of Sasfin Asia Limited

SasCred Financial International GBP50 000 – – 50 Services Limited trade finance(incorporated in and wealthJersey) management

The financial position of the companies listed above is material for a proper appreciation of the affairs of the Group. Detailed information in respect of all non-material subsidiaries is obtainable from the Group Secretary.

Loans advanced by the Company to Group companies are unsecured, interest free, with no terms of repayment.

All subsidiaries, special purpose entities, associated and joint venture companies have co-terminous year ends except forPioneer Employee Benefits (Pty) Limited which has a 31 December year end.




capital capital

2007 2006 2007 2006 2007 2006

% % R'000 R'000 R'000 R'000



:8400:84


39. ESTIMATION AND JUDGEMENT APPLIED BY MANAGEMENT IN APPLYING ACCOUNTING POLICIES

Estimates and assumptions are continually evaluated based on historical and other factors, including expectations of future

events that are believed to be reasonable under the circumstances. The results of estimates and assumptions form the basis

of making judgements about the carrying value of assets and liabilities. Actual results may differ from the estimates made.

Impairment of loans and advances

The Bank adopted an incurred-loss approach to impairment. Impairment losses are incurred only if there is objective evidence

of impairment as a result of one or more past events that has occurred since initial recognition. This necessitates the

establishment of ‘impairment triggers’ on the occurrence of which an impairment loss is recognised.

Credit impairment is based on discounted estimated future cash flows on an asset or group of assets, where such objective

evidence of impairment exists. The discount rate used to calculate the recoverable amount excludes consideration of any

anticipated future credit losses.

The Bank has created a provision for incurred but not reported (IBNR) losses. The purpose of the IBNR provision is to allow

for latent losses on a portfolio of loans and advances that have not yet been individually evidenced. Generally, a period of

time will elapse between the incurrence of an impairment event and objective evidence of the impairment becoming evident,

which is known as the ‘emergence period’. The IBNR provision is based on the probability that loans that are ostensibly

performing at the calculation date are impaired, and objective evidence of that impairment becomes evident during the

emergence period.

Intangible assets and goodwill

The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy disclosed.

The recoverable amounts of cash-generating units (CGU) have been based on the value-in-use calculations. The assumptions

applied for these variables match those applied in the preparation of group budgets and forecasts. Assumptions are supported

by past experience. The estimated impairment of intangibles and goodwill is RNil (2006: RNil). Please refer to note 10.

Deferred taxation asset

The deferred taxation asset is recognised based on the probability that sufficient future taxable profits will be available to

realise the asset carried for assessed losses within a three- to five-year horizon.

Private equity investment valuations

Private equity investments are based on the underlying value of the net assets and unrecognised intangible assets within the

investment vehicles concerned. These values are established by the directors and/or the trustees of those vehicles or

prevailing market conditions. The basis of valuation is reviewed by the investment committee of the Group.

Fair value of derivatives

The fair value of financial instruments that are not quoted in active markets is determined by using valuation techniques.

Where valuation techniques or models are used to determine fair values, they are validated and periodically independently

reviewed by qualified senior personnel. All models are authorised before they are used, and models are calibrated and back

tested to ensure that outputs reflect actual data and comparative market prices. To the extent practical, models use only

observable data, however areas such as credit risk (both own and counterparty), volatilities and correlations require

management to make estimates.


:8500:85



40. SHARE BASED PAYMENTS40.1 The Sasfin Share Incentive Scheme – Equity settled

The Group has an established share option scheme which entitles certain staff to acquire shares in the Company. Inaccordance with the scheme, options are exercisable at the market price of the shares at the date of the grant.

Grants within this scheme, which were offered before 7 November 2002 exist. The recognition and measurementprinciples in IFRS 2 have not been applied to these grants in accordance with the transitional provisions of IFRS 1 andIFRS 2.

TrustThe Sasfin Share Incentive Trust

Description of the arrangementShare options are granted to personnel holding various job levels with the Group, the granting of share options is atthe discretion of the trustees, acting on recommendation of executive management. The granting of share options isbased on job level and performance. Grant dates are determined by the trustees.

Vesting requirements and contractual life of optionsThe terms and conditions of the grants are three years of service, thereafter share options vest over three consecutiveyears. The contractual life of the options is three years.

166 667 share options were exercised by directors during the year. See further details of the options held by theexecutive directors below.

The number and weighted average exercise prices of the equity-based share options are as follows:

Number of Option Weighted Option

ordinary shares price range average price expiry period

(cents) (cents)

382 645 415 – 1470 565 Year to 30 June 2008

152 975 540 – 1900 1 164 Year to 30 June 2009

99 999 600 – 4500 2 743 Year to 30 June 2010

92 167 600 – 4500 2 856 Year to 30 June 2011

41 666 3325 – 4500 4 030 Year to 30 June 2012

769 452*

* Included in the outstanding options are the following to executive directors:

AW Greenstein – 166 666 options at a strike price of 490 cents, which vest in 2008; M Segal – 150 000 options at a strike price of 1 900 cents, which vest in 2008, 2009 and 2010; M Segal – 50 000 options at a strike price of 3 325 cents, which vest in 2009, 2010 and 2011.




:8600:86


2007 2007 2006 2006

Weighted Number of Weighted Number of

average options average options

exercise price exercise price

(cents) (cents)

40. SHARE BASED PAYMENTS (continued)40.1 The Sasfin Share Incentive Scheme – Equity settled

(continued)

GROUP SHARE INCENTIVE SCHEME RECONCILIATION

Options outstanding at beginning of the year 782 1 079 020 616 1 534 780

Granted 3 493 144 200 1 900 167 333

Exercised 529 (390 485) 613 (562 304)

Lapsed 656 (63 283) 782 (60 789)

Options outstanding at end of the year 1 429 769 452 782 1 079 020

The fair value received in return for share options granted is measured by reference to the fair value of share options

granted. The estimate of the fair value of the services received is measured based on the Black Scholes model. The

contractual life of the option (three years) is used as an input into this model. Expectations of early exercise are

incorporated into the Black Scholes model.

40.2 The Sasfin Share Appreciation Scheme – Cash settledDuring the year under review, the Group devised a bonus scheme whereby employees will be awarded a cash bonusbased on the movement in the Company’s share price. The amount of the bonus is based on Sasfin Holdings Limited'slisted share price movement on the JSE.

The future cash bonus obligations relating to the Sasfin Share Appreciation Scheme is valued by making use of the Black-Scholes model.

The market price movements of the ordinary share options valued during the year ranged from 4 800 cents to 6 695cents and the subscription benchmark prices ranged from 894 cents to 3 000 cents.

Group

2007 2006

R'000 R'000

The following assumptions are made:

Weighted average fair value at measurement date 805 716

Weighted average share price 13 10

Average expected volatility 697,17 713,92

Average dividend yield rate 7,22 9,33

Average risk free rate 8,94 9,33

Volatility is determined using expected volatility of Sasfin Holdings Limited ordinary shares listed on the JSE.


:8700:87




2007 2006

R'000 R'000

40. SHARE BASED PAYMENTS (continued)40.3 The Sasfin Share Incentive Trust

BALANCE SHEET

Total assets 574 729

Current liabilities 40 13

Loan from Sasfin Holdings Limited 359 644

Equity 175 72

574 729

INCOME STATEMENT

Income 174 287

Operating expenses (149) (24)

Income tax expense – (7)

Net profit for the year 25 256

At year end, the trust held 37 058 (2006: 78 963) shares in Sasfin Holdings Limited

41. RELEVANT STANDARDS AND INTERPRETATIONS BECOMING EFFECTIVE FOR YEARS ENDING AFTER 30 JUNE 2007

At the date of authorisation of the financial statements of the Group for the year ended 30 June 2007, the following Standards

and Interpretations were in issue but not yet effective:

Standard/Interpretation Effective date

IAS 23 Borrowing Costs Annual periods commencing on or after1 January 2009

IFRS 7 Financial Instruments: Disclosures (including Annual periods commencingamendments to IAS 1(AC 101), Presentation of on or after 1 January 2007*Financial Statements: Capital Disclosures)

IFRS 8 Operating Segments Annual periods commencing on or after1 January 2009*

IFRIC 10 Interim Financial Reporting and Impairment Annual periods commencing on or after1 November 2006*

IFRIC 11 IFRS 2 – Group and Treasury Share Transactions Annual periods commencing on or after1 March 2007*

IFRIC 12 Service Concession Arrangements Annual periods commencing on or after1 January 2008*

IFRIC 13 Customer Loyalty Programmes Annual periods commencing on or after1 July 2008*

IFRIC 14 IAS19 – The Limit on a Defined Benefit Asset, Minimum Annual periods commencing Funding Requirements and their Interaction on or after 1 January 2008*

* All standards will be adopted at their effective date (except for the effect of those standards that are not applicable to theentity)



:8800:88


41. RELEVANT STANDARDS AND INTERPRETATIONS BECOMING EFFECTIVE FOR YEARS ENDING AFTER 30 JUNE 2007

(continued)

IFRIC 12 and IFRIC 13 are not applicable to the business of the Group and will therefore have no impact on future financial

statements. The directors are of the opinion that the impact of the application of the remaining standards will be as follows:

IFRS 7

The disclosures provided in respect of financial instruments in the financial statements of the period ending 30 June 2008, as

well as comparative information, will be compliant with IFRS 7 and the amendments to IAS 1. The disclosure requirements of

IFRS 7 require additional disclosure compared to that required in terms of existing IFRSs in respect of capital objectives and

policies.

The adoption of IFRS 7 will not have any impact on the accounting policies adopted for financial instruments.

IFRS 8

IFRS 8 will be adopted by the Group for the first time for its financial reporting period ending 30 June 2010.

In terms of this IFRS, segment reporting will be based on the information that management uses internally for evaluating

segment performance and when deciding how to allocate resources to operating segments. Such information may be different

from what is used to prepare the income statement and balance sheet.

The operating segments of the Group are the same as the current business segments based on IAS 14.

The adoption of IAS 39 will not have any impact on the accounting policies adopted for segments.

IFRIC 10

IFRIC 10 will be adopted by the Group for the first time for its financial reporting period ending 30 June 2008.

IFRIC 10 prohibits the Group from reversing impairment losses recognised in an interim period on goodwill, investments in

equity instruments classified as available-for-sale and financial assets carried at cost in terms of IAS 39. The transitional

provisions of this Interpretation require retrospective application, but only from the dates on which IAS 36 and IAS 39 were

applied by the Group.

The effect of adopting IFRIC 10 has not yet been determined.

IFRIC 11

IFRIC 11 will be adopted by the Group for the first time for its financial reporting period ending 30 June 2008.

In terms of IFRIC 11, when a subsidiary grants rights to equity instruments of its parent to its employees, the subsidiary shall

account for the transaction with its employees as a cash-settled share based payment transaction. The Group previously

accounted for the transaction as an equity-settled share based payment transaction. The transitional provisions of this

Interpretation require retrospective application subject to the transitional provisions of IFRS 2.


:8900:89



Balancepreviously Reclassified Balance

disclosed amount restatedR'000 R'000 R'000

42. RESTATEMENT OF COMPARATIVES

The following restatements for reclassification and accounting corrections

have been made to the 30 June 2006 comparative financial statements:

42.1 Balance sheet

GROUP

Effect on assets

Taxation 171 (171) –

Effect on liabilities

Taxation 39 670 (171) 39 499

Segmental analysis

GROUP

Business Banking

Profit for the year 58 472 143 58 615

Headline earnings 54 697 12 54 709

Capital

Profit for the year 33 906 (24 833) 9 073

Headline earnings 22 449 (14 970) 7 479

Wealth Management (previously Personal Wealth)

Profit for the year 72 071 (122) 71 949

Headline earnings 23 172 (123) 23 049

Treasury

Profit for the year – 24 743 24 743

Headline earnings – 15 081 15 081

42.2 Statement of changes in equity

The treasury share component of ordinary share capital and premium has been separately disclosed.




:9000:90


43. SEGMENTAL ANALYSIS2007Interest income 205 725 4 097 1 128 15 656 102 951 (67 802) 261 755 Interest expense 131 772 5 1 826 357 60 524 (67 802) 126 682

Net interest income 73 953 4 092 (698) 15 299 42 427 – 135 073 Impairment losses on loans and advances 10 325 20 – – – – 10 345

Net income from lending activities 63 628 4 072 (698) 15 299 42 427 – 124 728 Other income 110 027 61 006 70 695 120 848 34 241 (6 831) 389 986

Operating income 173 655 65 078 69 997 136 147 76 668 (6 831) 514 714 Operating expenses 97 521 30 382 51 084 101 212 18 555 (6 831) 291 923

Net income from operations 76 134 34 696 18 913 34 935 58 113 – 222 791 Share of associated and joint venture companies' income 4 914 – 271 – – – 5 185

Profit before taxation 81 048 34 696 19 184 34 935 58 113 – 227 976 Income tax expense 20 931 6 318 6 830 11 132 11 390 – 56 601

Profit for the year 60 117 28 378 12 354 23 803 46 723 – 171 375

Profit attributable to:Minority interest 4 222 907 4 848 2 731 2 844 – 15 552Preference shareholders – – – – 15 904 – 15 904 Equity holders of the parent 55 895 27 471 7 506 21 072 27 975 – 139 919


Headline earnings 55 776 27 471 7 506 21 072 27 975 – 139 800

Total assets 1 919 078 305 248 107 646 282 952 – (69 972) 2 544 952 Total liabilities 762 930 837 439 55 004 185 136 – (69 972) 1 770 537 Capital expenditure 20 804 76 769 1 535 – – 23 184 Depreciation 8 888 26 1 235 1 640 – – 11 789

2006Interest income 179 591 2 221 1 289 5 611 65 683 (49 252) 205 143 Interest expense 101 331 – 942 110 39 421 (49 252) 92 552

Net interest income 78 260 2 221 347 5 501 26 262 – 112 591 Impairment losses on loans and advances 7 841 (270) – – – – 7 571

Net income from lending activities 70 419 2 491 347 5 501 26 262 – 105 020 Other income 110 035 22 696 58 652 176 429 9 177 (10 692) 366 297

Operating income 180 454 25 187 58 999 181 930 35 439 (10 692) 471 317 Operating expenses 99 626 13 475 43 996 95 976 3 063 (10 692) 245 444

Net income from operations 80 828 11 712 15 003 85 954 32 376 – 225 873 Share of associated and joint venture companies' income 3 958 – 319 – – – 4 277

Profit before taxation 84 786 11 712 15 322 85 954 32 376 – 230 150 Income tax expense 26 171 2 639 5 024 14 005 7 633 – 55 472


Profit attributable to:Minority interest 3 751 249 4 566 – 1 678 – 10 244 Preference shareholders – – – – 7 985 – 7 985 Equity holders of the parent 54 864 8 824 5 732 71 949 15 080 – 156 449


Headline earnings 54 709 7 479 5 732 23 049 15 081 – 106 050

Total assets 1 340 960 687 500 102 188 372 574 – (43 315) 2 459 907Total liabilities 660 677 739 553 49 100 385 264 – (43 315) 1 791 279Capital expenditure (39 188) 1 436 2 660 2 229 – 48 899 16 036 Depreciation 5 280 162 1 177 1 313 – – 7 932

EliminationWealth of inter-

Business Specialised Manage- group itemsBanking Capital Services ment Treasury and other Total

R’000 R’000 R’000 R’000 R’000 R'000 R'000


:9100:91

SHAREHOLDER ANDADMINISTRATIVE INFORMATION

as at 30 June

ANALYSIS OF HOLDINGClose corporations 13 1,3 42 061 2,2Individuals 783 75,6 1 132 175 59,4Mutual funds 1 0,1 3 200 0,2Nominees and trusts 174 16,8 494 227 25,9Other corporations 15 1,4 53 687 2,8Pension funds 26 2,5 46 968 2,5Private companies 23 2,2 132 182 6,9Public companies 1 0,1 500 0,1

1 036 100,0 1 905 000 100,0

SHAREHOLDER SPREADPublic shareholders 1 035 99,9 1 895 000 99,5Non-public shareholders– Directors and associates 1 0,1 10 000 0,5

1 036 100,0 1 905 000 100,0

Shareholders Shares held

ANALYSIS OF ORDINARY SHAREHOLDERS Number % Number %

ANALYSIS OF HOLDINGBanks 13 0,8 299 761 1,1Close corporations 28 1,7 72 116 0,3 Endowment funds 2 0,1 4 229 711 15,7Individuals 1 255 77,6 4 838 318 17,9Insurance companies 1 0,1 3 559 0,0Investment companies 1 0,1 116 510 0,4Medical aid schemes 1 0,1 550 0,0Mutual funds 16 0,9 2 623 823 9,7Nominees and trusts 186 11,5 3 747 975 13,9Other corporations 37 2,3 137 543 0,5Pension funds 12 0,7 79 718 0,3Private companies 58 3,6 2 498 261 9,2 Public companies 6 0,4 8 328 471 30,8Share trust 1 0,1 37 058 0,1

1 617 100,0 27 013 374 100,0

SHAREHOLDER SPREADPublic shareholders 1 607 99,4 11 290 121 41,8Non-public shareholders– Directors and associates 10 0,6 15 723 253 58,2

1 617 100,0 27 013 374 100,0

Shareholders Shares held

ANALYSIS OF PREFERENCE SHAREHOLDERS Number % Number %

ShareholderShareholder and Administrative Information


ShareholderShareholder and Administrative Informationcontinued

:9200:92


Unitas Enterprises Limited 7 315 062 27,1The Sassoon Children's Trust 4 694 310 17,4Marsas Holdings (Pty) Limited 1 926 902 7,1Sanlam 1 552 873 5,7Saprop Investments Limited 1 010 778 3,7 The Sydney Sassoon Trust 922 808 3,4The Glattfin Trust 837 000 3,1

PERFORMANCE OF ORDINARY SHARES ON THE JSE 2007 2006

Shares traded (number) 2 555 229 2 797 152 Price (cents)

Highest 5 000 4 000 Lowest 3 100 1 920 Year-end 4 810 3 200

Market capitalisation (R' 000) 1 299 343 853 289

Number % of

ANALYSIS OF MAJOR ORDINARY SHAREHOLDERS of shares issued shares

SASFIN HOLDINGS LIMITED SHARE PRICE

3 000

3 250

3 500

3 750

4 000

4 250

4 500

4 750

5 000

5 250

July Aug Sep Oct Nov Dec Jan Feb Mar Apr May

3 000

3 250

3 500

3 750

4 000

4 250

4 500

4 750

5 000

5 250

Jun

2006 2007

SHAREHOLDERS’ DIARY

Year-end 30 JuneReports published:

Interim for six months to December 2006 5 March 2007Preliminary announcement of annual results 11 September 2007Annual financial statements 25 October 2007

Interim ordinary share dividend paid 23 April 2007Final ordinary share dividend paid 5 November 2007Preference share dividend number 5 paid 10 April 2007Preference share dividend number 6 paid 29 October 2007Annual General Meeting 28 November 2007

cent

s

cent

s


:9300:93

NOTICE OF ANNUAL GENERALMEETING

SASFIN HOLDINGS LIMITED(Incorporated in the Republic of South Africa)Registration Number 1987/002097/06Ordinary Share Code: SFN ISIN: ZAE000006565Preference Share Code: SFNP ISIN: ZAE000060273(“Sasfin” or “the Company”)

Notice is hereby given that the 20th AnnualGeneral Meeting of shareholders of the Companywill be held at Sasfin Place, 13-15 Scott Street, Waverley, Johannesburg onWednesday, 28 November 2007 at 14H00, toconsider and if deemed fit, to pass, with orwithout modification, the following ordinaryresolutions:

1. Ordinary resolution number 1“Resolved to receive, consider and adopt theAnnual Financial Statements and the GroupAnnual Financial Statements for the yearended 30 June 2007, including the reports ofthe directors and the auditors.”

2. Ordinary resolution number 2“Resolved that Mr ETB Blight be re-elected asan independent non-executive director of theCompany.”

Mr Blight retires by rotation as a director ofthe Company in accordance with theCompany’s articles of association and iseligible and has offered himself for re-election.

Mr Blight joined the Company in his capacityas an independent non-executive director on16 January 2001. He retired from First NationalBank after 40 years’ service having beenGeneral Manager: Internal Audit, Security &Risk Management. He is the Chairperson ofthe Group Audit & Compliance committee, theAsset and Liability committee, the InformationTechnology Steering committee and the BaselII Committee, Sasfin Securities (Pty) Limitedand Sasfin Financial Advisory Services (Pty)Limited. He is a member of the RiskManagement committee, the Directors’ Affairscommittee and the Directors’ Strategy andReview committee. Mr Blight is 67 years old.

3. Ordinary resolution number 3“Resolved that Mrs DD Mokgatle be re-elected as an independent non-executivedirector of the Company.”

Mrs Mokgatle retires by rotation as a directorof the Company in accordance with theCompany’s articles of association and is

eligible and has offered herself for re-election.

Mrs Mokgatle joined the Company in hercapacity as an independent non-executivedirector on 21 May 2007. She was appointedas an independent non-executive director ofSasfin Bank Limited on 14 August 2006. She isthe Chairperson of the TransformationCommittee and is a member of the Asset andLiability committee and the Credit Reviewcommittee.

Mrs Mokgatle is Chairperson of ElectricityDistribution Industry Holdings (EDI), DeputyChairman of the National Energy Regulator ofSouth Africa and an independent non-executive director of Kumba Iron Ore Limited.Mrs Mokgatle has a BProc (University of theNorth) and LLB and H.Dip in Tax Law fromWitwatersrand University. Mrs Mokgatle is51 years old.

4. Ordinary resolution number 4“Resolved that Mr MS Rylands be re-electedas a non-executive director of the Company.”

Mr Rylands retires by rotation as a director ofthe Company in accordance with theCompany’s articles of association and iseligible and has offered himself for re-election.

Mr Rylands joined the Company in hiscapacity as a non-executive director on21 May 2007. He was appointed a non-executive director of Sasfin Bank Limited on5 August 2006.

Mr Rylands is a member of the Asset andLiability committee, the Group Audit andCompliance committee, the Group HumanResources and Remuneration committee andof the Information Technology Steeringcommittee.

He is a director and shareholder of bothInnoVent Investment Holdings (Pty) Limitedand Royal Africa Gateway (Pty) Limited andrepresents both these investment companieson the boards and executive committee of alltheir investments.

He worked at Arcus Facilities ManagementSolutions as Finance Director, at Arcus Gibbas Senior Associate and at Arcus EngineeringConsultants as Group Finance Associatebetween the years 1997 and 2002.

Notice of meetingNotice of Annual General Meeting


Notice of meetingNotice of Annual General Meetingcontinued

:9400:94

He holds an Accounting and Auditingqualification from the University of SouthAfrica. Mr Rylands is 35 years of age.

5. Ordinary resolution number 5“Resolved that the directors be authorised todetermine the remuneration of theCompany’s auditors.”

6. Ordinary resolution number 6“Resolved that KPMG Inc. and PKF (Jhb) Inc.be re-appointed as joint auditors of theCompany for the next financial year.”

7. Ordinary resolution number 7“Resolved that the aggregate executive andnon-executive directors’ fees for the pastfinancial year of R9 499 791 be approved.”

8. Ordinary resolution number 8“Resolved that the unissued ordinary sharesin the authorised ordinary share capital ofthe Company be and are hereby placed underthe control of the directors of the Companywho are authorised to allot and issue theordinary shares at their discretion, and onsuch terms and conditions and at such timesas they deem fit until the next AnnualGeneral Meeting of the Company, subject tothe provisions of the Companies Act, 61 of1973 as amended (“the Companies Act”), theBanks Act, 94 of 1990, as amended (“theBanks Act”) and the Listings Requirements ofJSE Limited (“JSE Listings Requirements”).

9. Ordinary resolution number 9“Resolved that the directors have the powerto allot and issue ordinary shares in theauthorised but unissued share capital of theCompany for cash as and when the directorsconsider it appropriate in the circumstances,subject to the Companies Act, any shareincentive trust deed entered into by theCompany, the articles of association of theCompany, the Banks Act and the JSE ListingsRequirements, when applicable, and thefollowing limitations, namely that:

9.1 this authority shall not endure beyondthe earlier of the next Annual GeneralMeeting of the Company or beyond 15(fifteen) months from the date of thismeeting;

9.2 there will be no restrictions in regard tothe persons to whom the shares may beissued, provided that such shares are tobe issued to public shareholders (asdefined by the JSE Listings Requirements)but not to related parties;

9.3 upon any issue of ordinary sharesrepresenting on a cumulative basiswithin a financial year, 5% (five percent)or more of the number of ordinaryshares in issue, the Company shall, byway of a paid press announcement interms of 11.22 of the JSE ListingsRequirements, give full details thereof,including the effect on the net assetvalue of the Company and earnings pershare, the number of securities issuedand the average discount to theweighted average traded price of thesecurities over the 30 days prior to thedate that the price of such issue wasdetermined or agreed by the Company’sdirectors;

9.4 that issues in the aggregate in any onefinancial year shall not exceed 15%(fifteen percent) of the number of issuedordinary shares of the Company(including instruments which arecompulsorily convertible into ordinaryshares) at the date of application lessany ordinary shares issued, or to beissued in the future arising fromoptions/convertible securities issuedduring the current financial year, plusany ordinary shares to be issuedpursuant to an announced, irrevocableand fully underwritten rights offer or tobe issued pursuant to any acquisitionfor which final terms have beenannounced;

9.5 the maximum discount at whichordinary shares may be issued is 10%(ten percent) of the weighted averagetraded price of the ordinary shares overthe 30 (thirty) business days prior to thedate that the price of the issue isdetermined or agreed by the directors,and


:95 00:95

NOTICE OF ANNUAL GENERALMEETING

9.6 under the JSE Listings Requirements a75% (seventy-five percent) majority ofvotes cast by the ordinary shareholderspresent or represented by proxy at thegeneral meeting is required to approvethe resolution.”

10. Ordinary resolution number 10“Resolved that the unissued non-redeemable,non-cumulative, non-participating, variablerate preference shares in the authorisedpreference share capital of the Company beand are hereby placed under the control ofthe directors of the Company who areauthorised to allot and issue the preferenceshares at their discretion, and on such termsand conditions and at such times as theydeem fit until the next Annual GeneralMeeting of the Company, subject to theprovisions of the Companies Act, 61 of 1973as amended (“the Companies Act”), theBanks Act, 94 of 1990, as amended (“theBanks Act”) and the Listings Requirements ofJSE Limited (“JSE Listings Requirements”).

VOTING AND PROXIESAll holders of the issued ordinary shares areentitled to attend and vote at the Annual GeneralMeeting. Holders of preference shares are onlyentitled to attend the Annual General Meeting.

Ordinary shareholders who hold their shares incertificated form or who are own name registereddematerialised shareholders who are unable toattend the Annual General Meeting but who wishto be represented thereat, are required tocomplete and return the attached form of proxyso as to be received at the registered office of theCompany by not later than 14h00 on Monday,26 November 2007. Ordinary shareholders whohave dematerialised their shares through aCentral Securities Depository participant (CSDP)or broker, other than by own name registrationwho wish to attend the Annual General Meetingmust instruct their CSDP or broker to issue themwith the necessary authority to attend themeeting, in terms of the custody agreemententered into between such shareholders and theirCSDP or broker. Ordinary shareholders who havedematerialised their shares through a CSDP orbroker, other than by own name registration whowish to vote by way of proxy, must provide theirCSDP or broker with their voting instructions, interms of the custody agreement entered into

between such shareholders and their CSDP orbroker. These instructions must be provided totheir CSDP or broker by the cut-off time or dateadvised by their CSDP or broker for instructionsof this nature.

By order of the board

S JacksonCompany Secretary6 September 2007

Registered office Transfer secretariesSasfin Place Computershare13-15 Scott Street Investor Services 2004Waverley (Pty) Limited2090PO Box 95104 PO Box 61051Grant Park Marshalltown2051 2107

Notice of meetingNotice of Annual General Meetingcontinued



:9600:96

SASFIN BANK LIMITED

JOHANNESBURGSasfin Place13-15 Scott StreetWaverley 2090PO Box 95104 Grant Park 2051Tel: +27 11 809 7500Fax: +27 11 887 2489/6167


DURBAN1st Floor Sasfin House7 The BoulevardWestway Office ParkSpine RoadWestville 3630PO Box 2771 Westway Office Park 3635Tel: +27 31 265 1385Fax: +27 31 265 1296/1297

SASCRED FINANCIAL SERVICES LIMITED andSASFIN ASIA LIMITED

Suite 3101 11th Floor AXA Centre151 Gloucester RoadWanchai Hong KongTel: +852 3752 1885Fax: +852 3752 1855

SASFIN SECURITIES (PTY) LIMITED

JOHANNESBURGSasfin Place North Block13-15 Scott StreetWaverley 2090PO Box 95104 Grant Park 2051Tel: +27 11 809 7500Fax: +27 11 809 7765


DURBAN1st Floor Sasfin House7 The BoulevardWestway Office ParkSpine RoadWestville 3630PO Box 2707 Westway Office Park 3635Tel: +27 31 265 1332Fax: +27 31 265 1350

EAST LONDON42 Beach RoadNahoon 5241PO Box 8041 Nahoon 5210Tel: +27 43 735 1270Fax: +27 43 735 1337

PLETTENBERG BAY (AGENCY)2 Village SquareMain StreetPlettenberg Bay 6600PO Box 494 Plettenberg Bay 6600Tel: +27 44 533 0897Fax: +27 44 533 0909

PORT ELIZABETHGround Floor Greyville HouseRing Road Greenacres 6045PO Box 27401 Greenacres 6057Tel: +27 41 363 5989Fax: +27 41 363 1692

PRETORIABuilding A Ground Floor South WingLord Charles Office Park337 Brooklyn RoadBrooklyn 0181PO Box 36002 Menlo Park 0102Tel: +27 12 425 6000Fax: +27 12 425 6060

SASFIN FINANCIAL ADVISORY SERVICES(PTY) LIMITED

JOHANNESBURGSasfin Place North Block13-15 Scott StreetWaverley 2090PO Box 95104 Grant Park 2051Tel: +27 11 809 7500Fax: +27 11 809 7794


Form of ProxyForm of Proxy

FORM OF PROXY

SASFIN HOLDINGS LIMITED(Incorporated in Republic of South Africa)Registration number 1987/002097/06Ordinary Share Code: SFN ISIN: ZAE000006565Preference Share Code: SFNP ISIN: ZAE000060273(“Sasfin” or “the Company”)

FOR USE ONLY BY CERTIFICATED ORDINARY SHAREHOLDERS AND OWN NAME REGISTERED DEMATERIALISED ORDINARYSHAREHOLDERS AT THE ANNUAL GENERAL MEETING OF SASFIN SHAREHOLDERS TO BE HELD AT SASFIN PLACE, 13-15 SCOTT STREET,WAVERLEY, JOHANNESBURG ON WEDNESDAY, 28 NOVEMBER 2007 AT 14H00 OR SUCH LATER TIME THAT MAY BE APPLICABLE (“THE ANNUAL GENERAL MEETING”).

I/We (Names in capital letters)

of (address)

being a member(s) of Sasfin and entitled, on a poll, to votes hereby

appoint of or failing him/her

of or failing them,the Chairman of the Annual General Meeting as my/our proxy to vote for me/us and on my/our behalf at the Annual GeneralMeeting of the Company to be held on Wednesday, 28 November 2007 and at any adjournment thereof.

Please indicate with an “X” in the appropriate spaces how you wish your votes to be cast. Unless this is done, the proxy will bedeemed to have been authorised as he/she thinks fit.

In favour Against Abstain

1. To receive, consider and adopt the Annual Financial Statements

2. To re-elect as an independent non-executive director, Mr ETB Blight

3. To re-elect as an independent non-executive director, Mrs DD Mokgatle

4. To re-elect as a non-executive director, Mr MS Rylands

5. To authorise the directors to determine the auditors’ remuneration

6. To re-appoint the joint auditors for the next financial year

7. To approve the directors’ fees for the past year

8. To place the unissued ordinary shares under the control of the directors

9. To grant the directors a general authority to issue ordinary shares for cash

10. To place the unissued preference shares under the control of the directors

Signature date

Please read the notes on the reverse side hereof.


NotesNotes to Form of Proxy

1. A Sasfin ordinary shareholder may insert thename of a proxy or the names of twoalternative proxies of the Sasfinshareholder’s choice in the space/s provided,with or without deleting “the Chairman ofthe Annual General Meeting”, but any suchdeletion must be initialled by the Sasfinordinary shareholder concerned. The personwhose name appears first on the form ofproxy and who is present at the AnnualGeneral Meeting will be entitled to act asproxy to the exclusion of those whose namesfollow.

2. A proxy is entitled to attend, speak and voteat the Annual General Meeting in place of theshareholder whom he or she is representing.A proxy need not be a member of theCompany.

3. Please insert an “X” in the relevant spacesaccording to how you wish your votes to becast. However, if you wish to cast your votesin respect of a lesser number of ordinaryshares than you own in Sasfin, insert thenumber of ordinary shares held in respect ofwhich you desire to vote. Failure to complywith the above will be deemed to authorisethe proxy to vote or to abstain from voting atthe Annual General Meeting as he/she deemsfit in respect of all the shareholder’s votesexercisable thereat. A Sasfin shareholder orhis/her proxy is not obliged to use all thevotes exercisable by the Sasfin shareholder orby his/her proxy, but the total of the votescast and in respect whereof abstentions arerecorded may not exceed the total of thevotes exercisable by the shareholder or byhis/her proxy.

4. The date must be filled in on this form ofproxy when it is signed.

5. The completion and lodging of this form ofproxy will not preclude the relevant Sasfinshareholder from attending the AnnualGeneral Meeting and speaking and voting inperson thereat to the exclusion of any proxyappointed in terms hereof. Where there arejoint holders of shares, the vote of the seniorjoint holder who tenders a vote, asdetermined by the order in which the namesstand in the register of members, will beaccepted.

6. Documentary evidence establishing theauthority of a person signing this form ofproxy in a representative capacity must beattached to this form of proxy unlesspreviously recorded by the transfersecretaries of Sasfin or waived by theChairman of the Annual General Meeting ofSasfin shareholders.

7. Any alterations or corrections made to thisform of proxy must be initialled by thesignatory/ies.

8. A minor must be assisted by his/her parent orguardian unless the relevant documentsestablishing his/her legal capacity areproduced or have been registered by thetransfer secretaries of Sasfin.

9. Forms of proxy must be received by theCompany, Sasfin Holdings Limited at 13 – 15Scott Street, Waverley, 2090 (PO Box 95104,Grant Park, 2051) by not later than 14h00 onMonday, 26 November 2007.

10. The Chairman of the Annual General Meetingmay in his absolute discretion, accept orreject any form of proxy which is completedother than in accordance with these notes.

11. If required, additional forms of proxy areavailable from the transfer secretaries ofSasfin.

12. Dematerialised shareholders, other than byown name registration, must NOT completethis form of proxy but must provide theirCSDP or broker with their voting instructionsin terms of the custody agreement enteredinto between such shareholders and theirCSDP or broker.



SASFIN GROUP CONTACTINFORMATION

Designed by

Printed by I


PRETORIABuilding A Ground Floor South WingLord Charles Office Park337 Brooklyn RoadBrooklyn 0181PO Box 36002, Menlo Park 0102Tel: +27 12 425 6003Fax: +27 12 425 6200

INNOVENT RENTAL AND ASSETMANAGEMENT SOLUTIONS (PTY) LIMITED

10th Floor Sandton Office TowersSandton City 2196PO Box 782005 Sandton 2146Tel: +27 11 884 8274Fax: +27 11 784 6599

PREMIER FREIGHT (PTY) LIMITED

JOHANNESBURG90 Electron AvenueIsando 1620PO Box 11288 Aston Manor 1630Tel: +27 11 573 9000Fax: +27 11 573 9599


DURBAN22 Keswick RoadMorningsideDurban 4001PO Box 47669 Greyville 4023Tel: +27 31 312 9352Fax: +27 31 312 0088

PORT ELIZABETH1st Floor Mercantile PlazaRing Road Greenacres 6045PO Box 1192 Port Elizabeth 6000Tel: +27 41 363 7660Fax: +27 41 363 5384

Email address: [email protected] addresses: www.sasfin.comwww.sfpsecurities.comwww.premierfreight.co.zawww.innovent.co.za

Call: 0861-sasfin or toll-free 0800 002 538


A Geoff Creation

OUR VISION

Entrepeneural corporate, commercial and private clients seekingwealth creation, enhancement and preservation.

OUR VALUES

The Sasfin group has identified the following core values as beingimperative to the achievement of its objectives.

• Satisfy all our stakeholders• Act with integrity, fairness and trust in all matters• Stay transparent and honest whilst striving for exellence• Focus 100% on our clients needs• Instil passion and create a culture of entrepeneural thinking and inovation• Nurture our our personnel and contribute to the development of our country

OUR MISSION

To be the preferred specialist banking and financial serviceprovider in our chosen markets.

OUR MISSION, VISION VALUESOUR MISSION, MARKETS AND VALUES

OUR MISSION

OUR MARKETS

OUR VALUES

To be the preferred specialist banking and financial servicesprovider in our chosen markets.

Entrepreneurial corporate, commercial and private clients seekingwealth creation, enhancement and preservation.

The Sasfin Group has identified the following core values as being imperative to the achievement of its objectives:

• satisfy all our stakeholders• act with integrity, fairness and trust in all matters• stay transparent and honest whilst striving for excellence• focus 100% on our clients’ needs• instil passion and create a culture of entrepreneurial thinking and innovation• nurture our personnel and contribute to the development of our country


HOLDINGS LIMITED

Sasfin A

nn

ual R

epo

rt 2007


Documents

Sasfin Annual Report 2007 - ShareData Online · Email address: [email protected] Web addresses: Call: 0861-sasfin or toll-free 0800 002 538 Group informationSasfin Group Contact Information